Background and

1
Aims
1.0 Introduction

This study explores the impact of relationship marketing on customer loyalty in banking

context. In particular, it will discuss the significance and influence of the underpinnings

of the relationship marketing such as trust, commitment, conflict handling, values and

empathy on customers’ loyalty in the banking sector. This chapter contains; (1)

Background of The Study, (2) Problem Statement, (3) Specific Objectives of This Study,

(4) Research Question, (5) Theoretical Framework, (6) Hypothesis, and (7) Significant of

the Study.

Part one (1) Background of The Study will describe about the background and

theories which related to this research. Part Two (2), Problem Statement discusses the

subject related to the topic. Part Three (3), Purpose of The Study highlights the objectives

of this research. Part Four (4), discusses what are the questions which needed to be

answered in this research, followed by Part Five (5) explains the theoretical framework of

1
the research. Part Six (6), consists of the hypothesis of the research and the lastly Part

seven (7) explains the significant of the research.

1.1 An overview of customer loyalty

Customer loyalty has been well established as a key to profitability and long-term

sustainability (Keating et al., 2003, Reichheld, 1996; Reichheld & Aspinal, 1993).

Reichheld & Schefter (2000) maintained that, while it is important for a commercial

enterprise to attract a large client, a sizeable customer-base by itself does not offer any

assurance of long-term profitability unless the firm can earn loyalty from its customers.

Consistent with this view, Kandampully (1998) argued that the ability of a service

organization to create, maintain and expand a large and loyal customer base over a long-

time horizon is critical to achieve and sustain a winning position in the marketplace. This

indicates that in any business sector, customer loyalty is a major competitive advantage.

A clearly examination of the literature on customer loyalty revealed several

differences in the conceptualization of this construct. For example, Shanker et al. (2003)

view loyalty purely as an attitude, whereas Hofmeyr & Rice (2000) consider loyalty to be

“the behavioral propensity to buy a brand repeatedly”. On a different note, Heskett (2002)

suggest that loyalty exist when a customer dedicates an increasing “share of wallet” to

repurchase from a firm. Knox and Walker (2001), however, argued that repurchase

2
behavior is a behavioral construct that refers to the extent to which consumers repeatedly

purchase from a firm, while loyalty is a more complex concept that involves both

psychological and behavioral components.

Thus, consumers are generally considered to be loyal when they hold favorable

attitudes toward a firm or its products or services, and when they repeatedly purchase

from the firm (Amine, 1998; Wong and Sohal, 2003). On the other hand, Jones & Sasser

(1995) considered customer loyalty to be “the feelings of attachment to or affection for a

company’s people, products or services”. They further suggested that these feelings

manifest themselves through many form of consumer behavior that will eventually reflect

on the bottom line of business organizations. Hence, customer loyalty is reflected through

numerous behavioral outcomes, not only repurchase behavior.

Why focus on customer loyalty? Customer loyalty has been well established as a

key to profitability and long-term sustainability (Keating et al. 2003; Reichheld, 1996;

Reichheld & Aspinall, 1993). Previous researches suggested that customer loyalty is a

key driver of financial performance in service organizations (Ganesh, Arnold, and

Reynolds 2000; Jones & Sasser 1995). Customer loyalty may be a more important

determinant of profit than market share and position (Heskett et al. 1994). By identifying

the antecedents of customer loyalty and understanding the impact of these antecedents on

customer loyalty, service provider can set in practices that enhance the relationship that

3
organizations develop with their customers, potentially resulting in higher levels of

customer loyalty.

It is generally recognized that there are linkages between service quality, customer

satisfaction and loyalty Caruana, (2002). However Oliver (1999) stated that the

suggestion that satisfaction generates loyalty in erroneous, with between 65% and 85% of

satisfied customers defecting to other suppliers. There have been a number of studies that

have looked at the antecedents of loyalty, including value, levels of functional and

emotional risk, and brand reputation, trust, effect and preference. A number of studies by

various researchers (Caruana, 2002; Oliver, 1999) have contributed to the understanding

of the relationship between the consumer and provider.

Higher levels of customer loyalty in service organizations initiate a series of

economic effects in a business system. Revenues and market share grow as loyal

customers commit to the organization, become repeat customers, and recommend the

organization to others. Reichheld & Sasser (1990) conducted their studies across 14

industries in the United States and found that a 5% increase in customer retention leads to

an increase in profit of between 25% to 95%.

Keaveney (1995) argued that losing a regular customer is a loss from the higher

margin part of an organization customer-base. Customer loyalty also leads to lower costs

4
of retention compared to the costs of attracting new customers. In addition, Reichheld &

Sasser (1990) indicated that it is five times more expansive to win a new customer than it

is to retain an existing one. By retaining existing customers’ helps a firm reduces a large

portion of marketing expenses and other associated costs that would otherwise have to be

spent in order to attract and set up new customers (Bowen and Shoemaker, 1998; Egan,

2000; Keaveney, 1995; Tepeci, 1999).

1.2 An overview of the banking sector

An institution is defined as:

“An established law, custom, usage, practice, organization, or other element in

the political or social life of a people; a regulative principal or convention subservient to

the needs of an organized community or the general ends of civilization”. (Oxford

English Dictionary, 1989).

Institutional stature is therefore classified as the importance placed on banks by

the community. Banks serve fundamental needs both on an individual level and at a

community level, which has sustained their institutional stature. Banks gain institutional

stature by catering to the needs of the community as a whole, not just the needs of

individual customers and the imperative of corporate objectives.

5
1.2.1 Retail Banking

Retail banking or consumer banking includes all form of banking undertaken by

individuals for their own individual (or family) purpose. Retail banking encompasses any

type of banking relationship from mere transactional banking with savings or credit

accounts, through to consumers who use their bank for mortgages and investment

banking.

Two terms commonly used throughout this dissertation are “conventional

banking” and “electronic banking” and these are both forms of retail banking. Bank

customers can use conventional banking facilities or electronic banking facilities

independently and solely or both forms of banking. These terms are fully explained as

follows:

1.2.2 Conventional Banking

Conventional banking is often called over-the-counter banking, because it is a term used

to describe banking that occurs with the customer inside a bank branch. Conventional

banking can be as basic as a deposit or withdrawal transaction through to negotiating a

6
bank loan or an account enquiry. All transactions conducted inside a bank branch are

classified as conventional banking throughout the study.

1.2.3 Electronic Banking

The term electronic banking is used for banking that occurs outside of a bank branch or

face-to-face meeting with a bank employee. Few types of electronic banking are ATM

banking, Internet banking and telephone banking. Again, this can be as basic as deposit or

withdrawal transaction such as negotiating a bank loan or making an account enquiry.

1.2.4 Bank vs. customers

Banking and financial services are an important part of services industry Mishkin, (2001).

He also conducted that who are satisfied and also complained with the service recovery

efforts of the bank are three times more likely to recommend the bank to someone else

and to do increased business with the bank.

Now, banks managers knew that delivering quality service to customers is major

important for success and survival in today’s global and competitive banking

7
environment. Customer-seller relationship is recognized as pervasive, inescapable and

high interdependent, with ties between consumer and business vital to the interest of both

parties. Both parties which are customer and form will gain mutual reward by having a

customer relationship. Consumer’s benefit in terms of enhanced value, better quality and

increased satisfaction with their purchased (File & Prince, 1993). While the other parties

which are firm will gain benefit from greater sales volume, better operating efficiencies,

positive word of mouth publicity, improved customer feedback, and decreased marketing

expenses (Reichheld & Sasser, 1990; Vavra, 1992).

Now days, there are many variety of new banking products such as automated

teller, machine, phone banking, tele-banking, Internet banking and many others. All these

products were developed for the purposed to accommodate the increased of the customer

needs, giving a clear direction regarding the changes of the banking industry has going

through during the last two decades. Cost of transaction has been reduced and at the same

time can increased the speed of service substantially. Growing applications of these

technologies especially the computerized networks to banking has led to more usage of

electronic banking.

In order to achieve success in such a technology driven, complex and competitive

market of today, there are few key areas that need to be considered if banks want their

customer to be loyal. One of the keys areas is gaining the information about customers

and thereby better understanding their needs and serves them satisfactorily. Hence, there

8
are more and more firms spending a lot on strong firm-customer relationship for the

purpose in gaining invaluable information on how best way in serving customers and

keep them from turning to the other firms or organizations. Therefore, nowadays

customer relationship marketing becomes the key factor in determining a firm’s profit.

1.3 Problem Statement

Service quality offers a sustainable competitive advantage to a bank because it creates

value and also customer satisfaction. However, service quality is reduced drastically by

service breakdowns. The results of service breakdowns are customer dissatisfaction and

possibly customer defection depending on the customer’s trust, knowledge and the

availability of alternative service provider. In the banking sector, to maintain and having a

closer relationship with the entire or existing customers are very important.

The maintenance of consumer trust in the retail banking industry is of

considerable importance as it can impact on the likelihood of retaining existing customers

(Morgan & Hunt, 1994) and attaining new ones. Furthermore, trust in a bank can also be

more important to a bank customer than price. So, each bank must make sure that their

services fulfill their customers’ needs and wants.

9
 The focus on this research is to identify the common relationship marketing

underpinnings such as trust, commitment, empathy, values and conflict handling on

customer loyalty in banking sector. This research will also look whether all dimensions

mentioned contribute equally or differentially towards the loyalty of the customer.

1.4 Purpose of Study

1.4.1 General purpose

This study examines the concept of five underpinnings of the relationship marketing and

the concept of customer loyalty. In particular, it aims to explore the nature of relationship

marketing underpinnings and how it will affect each of the customers to be loyal towards

their bank.

1.4.2 Specific purpose

In assuring that the above objectives can be achieved, there are few specific objectives

that need to be accomplished. These specific objectives are as follows:

(i) To determine whether trust influence the extent to which customer’s loyalty

towards their banks.

(ii) To test whether commitment influence the extent to which customer’s loyalty

towards their banks.

10
 (iii) To identify whether empathy influence the extent to which customer’s loyalty

towards their banks.

(iv) To determined whether values influence the extent to which customer’s

loyalty towards their banks.

(v) To test whether conflict handlings influence the extent to which customer’s

loyalty towards their banks.

1.5 Research Question

(i) Will trust dimension influence the customer’s loyalty towards their banks?

(ii) Will commitment influence the customer’s loyalty towards their banks?

(iii) Will empathy influence the customer’s loyalty towards their banks?

(iv) Will values influence the customer’s loyalty towards their bank?

(v) Will conflict handlings influence the customer’s loyalty towards their banks?

11
1.6 Theoretical Framework

The theoretical framework is the foundation on which the entire research project is based.

It developed, described and elaborated network of associations among the variables that

are deemed relevant to the problem situation that have been identified, through few

process such as interviews, observations and a literature survey (Cavana, 2001). There are

five basic features that should be incorporated in any theoretical framework:

(i) The variables considered relevant to the study should be clearly identified and

labeled in the discussions.

(ii) The discussion should state how two or more variables are related to one

another. This should be done for the important relationships that are theorized

to exits among the variables.

(iii) If the nature and direction of the relationships can be theorized on the basis of

the findings from previous research, then there should be an indication in the

discussions as to whether the relationships would be positive or negative.

(iv) There should be a clear explanation of why we would expect these

relationships to exist. The arguments could be drawn from the previous

research findings.

(v) A schematic diagram of the theoretical framework should be given so that the

reader can see and easily comprehend the theorized relationships.

12
1.6.1 Dependent Variables

The dependent variable is the variable of primary interest to the researcher. The

researcher’s goal is to understand and describe the dependent variable, or to explain its

variability or predict it. In other words, it is the main variable that lends itself as a viable

factor for investigation. Through analysis of the dependent variable, it is possible to find

solutions to the problem (Cavana, 2001).

1.6.2 Independent Variables

An independent variable is one that influences the dependent variable in either a positive

or negative way; that is, when the independent variable is present, the dependent variable

is also present, and with each unit of increase in the independent variable, there is an

increase or decrease in the dependent variable also. In other words, the variance in the

dependent variable is accounted for by the independent variable (Cavana, 2001).

13
Figure1.1: Theoretical Framework of the Research

INDEPENDENT VARIABLE DEPENDENT VARIABLE

Trust
Adopted From: - Ndubisi
(2005)

Commitment
Adopted From:- Ndubisi
(2005)
Customers’
Loyalty
Adopted From:-
Ndubisi (2005)
Conflict Handling
Adopted From: - Ndubisi
(2005), Naceur &
Azaddin (2005)

Values
Adopted From: - Naceur
& Azaddin (2005)

Empathy
Adopted From: - Huseyin
et al. (2005), Ndubisi
(2005) and Beerli et al.
(2004)

14
1.7 Hypothesis

A hypothesis can be defined as a logically conjectured relationship between two or more

variables expressed in the form of a testable statement. Relationships are conjectured on

the basis of the network of associations established in the theoretical framework

formulated for the research study. By testing the hypothesis and confirming the

conjectured relationships, it is expected that solutions can be found to correct the problem

encountered (Cavana, 2001). Based on the literatures, it can be hypothesized that trust,

commitment, empathy, equity and conflict handling have a direct affect on customer

loyalty especially in banking sector.

The following hypotheses are generated:

The first hypothesis is stated as follows:

H1 : There is no relationship between relationship marketing and customers’

loyalty in banking sector.

The second hypothesis is stated as follows:

H2 : There is no relationship between “trust” with customers’ loyalty in

banking sector.

15
The third hypothesis is stated as follows:

H3 : There is no relationship between “commitment” with customers’ loyalty

in banking sector.

The fourth hypothesis is stated as follows:

H4 : There is no relationship between “conflict handling” with customers’

loyalty in banking sector.

The fifth hypothesis is stated as follows:

H5 : There is no relationship between “values” with customers’ loyalty in

banking sector.

The sixth hypothesis is stated as follows:

H6 : There is no relationship between “empathy” with customers’ loyalty in

banking sector.

16
1.8 Significant of Study

The central thrust of the marketing activities of an organization is to develop, maintain

and enhance customer loyalty towards its products or services. Relationship with loyal

customers are typically less expensive to serve, and loyal customers contribute to the

organization by buying more and paying premium prices, and engaging in behaviors that

are beneficial to the organization such as acting as advocates of the organization (Ganesh,

Arnold, and Reynolds, 2000). Other benefits also accrue. Customers who enter a

relationship with an organization as a result of a personal referral tend to be more loyal

than those who buy because of an advertisement (Reichheld, 1993).

Customers’ loyalty is important to any organization in term of enhancing their

profit. Without customers it is impossible for organization to enhance or grow their

businesses. Observing and studying their customer’s behavior, firms can develop

strategies which can give them more profit. In the service sector, for example in banking

sector, firms really need to be more alert of their customer needs and wants. In order to

sustain their competitiveness in the marketplace, each bank needs to provide the excellent

service towards their entire of customers. If the firms failed to maintain and enhance their

services, it is impossible for them to achieve their targets. However, it is really difficult to

achieve customers’ loyalty. Therefore, it is important that each bank provide great

services by fulfilling their entire customers needs, increasing their customers satisfaction

and ultimately gaining the loyalty of the customers’.

17
 Therefore, the findings of this research will contribute to banking service

providers on how to implement strategies that will meet their customer’s needs and

ultimately win their loyalty.

1.9 Chapter Conclusion

In this chapter, it is apprehensive in terms of preparing and also completing the whole

research by concerning the various important aspects such as problem statement, purpose

of the study, significant of the study and others.

1.10 Overview of the thesis

The thesis is set out in three major sections divided into five (5) chapters. The first

section addresses the foundation of the study, the development of the conceptual

framework and research hypotheses including the literature review (Chapter 1 and

Chapter 2). The second section addresses the methodology (Chapter 3) of the research, a

discussion and presentation of the data analysis process, and provides the result study

(Chapter 4). The final section of the thesis includes discussion of the results and

implications of the research (Chapter 5).

18
 Literature
2
Review
2.0 Introduction

This chapter reviews the literature on customer loyalty, trust, commitment, empathy,

equity and conflict handling. The first section is concerned with the nature and

characteristic of customer loyalty and also the underpinnings of relationship marketing.

The focus of this section is on how each of these constructs influences loyalty from each

customers.

2.1 Customer Loyalty

The topic of consumer loyalty has gained its importance as the recognition of the benefits

that can be derived from loyal customers emerges. The increasing level of competition is

evident in most industries has resulted in an increased customer focus, with the need to

meet customers’ expectations becoming more critical (Disney, 1999). The context of

loyalty is of particular importance for service industries that are surrounded by the

19
service characteristics of inseparability of production and consumption, heterogeneity and

intangibility.

Initial research viewed loyalty purely as repeat purchase behavior with no

implications of a cognitive relationship (Caruana, 2002). This perspective of loyalty has

change, with recognition that loyalty is a complex phenomenon that includes a range of

behavioral, attitudinal and cognitive aspects of behavior (Caruana, 2002). However, there

is criticism that much of the loyalty research still focuses on cognitive decision-making

(Fournier, 1998).

There is considerable generic literature on consumer loyalty, and some

researchers have defined loyalty in behavioral terms based on the volume of purchase for

a particular brand (Tranberg & Hansen, 1986). Other defines loyalty as attitudinal, with

loyalty being defined in terms of preferences or intentions (Jacoby & Kyner, 1973). There

is consensus that there is distinction between repeat purchase behaviors, even if derived

from customer satisfaction, and genuine loyalty. Behavioral loyalty is more important to

an organization as actual purchase behavior is more relevant than attitudinal. This reflects

recognition that behavioral loyalty derives from many sources, including attitudinal

loyalty as well as other reason, such as convenience and lack choice and that an

attitudinal loyal consumer may be behaviorally disloyal for similar reason (Oliver,

1999).

20
 Furthermore, customer loyalty is a combination of commitment to a service

relationship and the outcome of an overall of feeling or attachment to the service

organization, manifest of an overall state of feeling or attachment to the service

organization, manifest by overt loyalty-related behaviors. These behaviors include

primary behaviors, such as repeat patronage and share of purchase, and active and

passive secondary behaviors such as expansion of service usage, price insensitivity, and

resistance to counter-persuasion, customer referrals and spreading positive word-of-

mouth (Ganesh, Arnold, and Reynolds 2000; Jones & Sasser 1995; Zethaml, Berry, and

Parasuraman 1996).

Service loyalty is the degree to which a customer exhibits repeats purchasing

behavior from a service provider, possesses a positive attitudinal disposition toward the

provider, and considers using only this provider when a need for this service arises

(Gremler and Brown, 1999). Prior research has shown that customer loyalty is influenced

by numerous factors such as service quality (Olsen, 2002), perceived value (Parasuraman

& Grewal, 2000), trust (Reichheld & Schefter, 2000) and commitment (Baldinger &

Rubinson, 1996; Pritchard et al, 1999).

21
2.1.1 The dimensions of the customer loyalty construct

The discussion of customer loyalty is built around the literature shown in Table 1.2. The

table seeks to build a composite of the development of the conceptualization of customer

loyalty over time. Each research paper is classified in term of the behavior-based,

attitudinal and or relationship viewpoint that the paper takes. The studies in the table are

listed in chronological order and are the key studies cited in this literature review. The

context of the research is classified as goods, branding, or services.

The behavior-based aspect of customer loyalty is categorized as primary or

secondary. Primary behavior-based are those that are repeat purchase concepts.

Secondary behaviors are grouped as either or passive. Active behaviors are those that

require conscious and deliberate effort to undertake. Passive behaviors are those that

result from a state of resistance to change the existing relationship with the organization.

When a paper includes an attitudinal approach to customer loyalty, that paper is

categorized as adopting a general, relative, or component based attitude approach. A

further attitude category includes an action category that encompasses an attitudinal

mindset in which a consumer would take steps to foster a positive attitude towards a

brand or service. Finally the table notes whether or not customer loyalty is conceptualized

as having a relationship-based foundation.

22
 The conclusion drawn from Table 2.1 is that current research on customer loyalty

centers on customers primary and secondary behaviors regarding the organization,

customers’ intent to remain with the organization, and the relationship customers have

with the organization. The following discussion regarding the dimensions of the customer

loyalty construct is developed in the context of this conclusion.

The research stream relating to customer loyalty began with studies that focused

on repeat purchase of tangible goods. Because loyalty as a pattern of repeat purchase was

inadequate to explain actual repurchase behavior, researchers sought to explain

motivation to continue buying a good by turning to attitudinal explanations. Research

then turned to studies of brand loyalty again in the context of tangible goods. This

23
behavior plus attitude approach became more complex and also explained with more

certainty actual long-term behavior. Finally, concepts of customer loyalty were developed

in the services context. The discussion of customer loyalty is structured around the

dimensions of customer loyalty as they developed from simple repeat purchase of goods

conceptualization to complex relationship-attitude-advocacy-behavior concepts. That is,

customer loyalty is the state that arises from a customer’s belief about an organization,

feelings towards an organization, and intent to behave in a particular manner in relation to

the organization. Early research conceptualized customer loyalty as a pattern of repeat

purchase. This research also notes an unexplained element to repeat purchase cycles

(Oliver, 1993). This unknown element suggests a strong motivation akin to commitment

to purchasing behaviors beyond habit that have become the focus of subsequent research.

To explain this unknown element of loyalty, and other aspects of loyalty and switching

behaviors, researchers turned to attitudinal explanations for brand-specific purchase

patterns within a product category.

Day (1969) defined loyalty as repeated purchases based on a strong internal

disposition and spurious loyalty as purchase not based on this same strong attitude.

Loyalty in this framework has two dimensions-composites of attitude and composites of

behavior. When an individual has a strong disposition to purchase a product from a set of

alternatives, the choice is based on an appraisal of those alternatives. Loyalty is a

combination of the held attitudes, situation in when the choice is made, and the

subsequent behavior consistent with the combination.

24
 The measure loyalty, Day (1969) suggested using a composite index consisting of

a simultaneous consideration of loyal attitude and subsequent behavior. The behavioral

aspect of loyalty was a measure of the proportion of purchase of a specific brand.

However, purchase consistency did not necessarily mean that the customer was brand

loyal. Purchase consistency could mean that the behavior was spuriously driven by price

or other factors and not the strongly held loyalty attitude (Day, 1969). Thus, brand

attitude and brand-related behavior combine in Day’s loyalty conceptualization. This

conceptualization forms the foundation of subsequent research and is hus a key advance

in brand loyalty research.

Jacoby (1971) proposed a model of multi-brand loyalty, using a psychological

framework where brands could be viewed as substitutes for each other, if they were

perceived to be within an acceptable quality range. A later analysis of loyalty defined

loyalty as the nonrandom purchase over time of one brand from a set of brands by a

consumer using an explicit evaluation process (Jacoby, 1971; Jacoby & Kyner, 1973).

Jacoby & Chestnut (1978) distinguish among degrees of loyalty to a brand of interest, in

relation to competing brands (Table 2.2).

25
 Table 2.2: Loyalty categories

Psychological loyalty to:

Focal Brand Multiple Other Brand No Brand

Brands

Focal True loyalty Multiple-brand Non-loyal Happen-stance

Brand Buyer loyal buyer repeat buyer buyer
Repeat
purchase Other Happen-stance Multi-brand Other brand Happen-stance
of: Brand other brand loyal buyer loyal buyer buyer
buyer
Source: (Jacoby, 1971; Jacoby & Chestnut, 1978; Oliver, 1997)

This categorization interrelates the nature of a customer’s psychological loyalty in

a brand category (to either the focal brand, a collection of brands including the focal

brand, other brands excluding the focal brand, or no brand in the category) to purchasing

behavior in that brand category. The resulting set of brand loyalty categories allowed for

more detailed study on the factors that influence each loyalty category in relation to the

focal brand. Subsequent research sought to explain how consumers came to their loyalty

decisions. Amongst the categories, true focal brand loyalty is to the brand of interest.

True multi-brand loyalty is loyalty to the focal brand and similar competing brands. Non-

loyal repeat purchasing of the focal brand indicates loyalty to another brand.

Happenstance purchasing of the focal brand indicates non-brand purchase. Happenstance

purchasing includes any repeat purchase sequence due to factors other than true

psychological loyalty, such as when a favored brand is unavailable or there are temporary

disruptions to purchase behavior (Jacoby & Kyner, 1973).

26
 Jacoby & Chestnut (1978) sought to differentiate psychological concepts of

loyalty from behavioral, repeat purchase definitions. They conclude that consistent

purchasing as an indicator of loyalty could be invalid because of happenstance buying or

a preference for convenience. Inconsistent purchasing could mask loyalty if consumers

were multi-brand loyal, suggesting that inferring loyalty or disloyalty based on repetitive

purchase patterns without further analysis is simplistic. Oliver (1997) notes that loyalty

definitions progressed from patterns of repeat purchasing to multibrand and attitude-

based models leading to the cognitive-effective-cognitive representation of brand

commitment.

Thus, Oliver (1997) deepens the discussion of loyalty to include the enduring

effects of loyalty, so that loyalty is conceptualized as enduring preferences for products

and services. Loyalty implies continues purposeful interaction, however infrequent, with

a product or service. This framework follows the cognition-affect-conation pattern but

differs in that he argues that consumers can become loyal at each attitudinal phase

relating to different elements of the attitude development structure. That is, consumers

become loyal in a cognitive sense first, then in an affective sense, followed by a conative

manner, and finally in a behavioral manner, action inertia. Consumers progress through

these phases. Cognitive loyalty focuses on critical evaluation of the brand attitudes,

affective loyalty focuses on emotional reaction to the brand, conative loyalty focuses on

the desire to rebuy the brand, and action loyalty is commitment to the action of rebuying

(Oliver, 1997). Table 2.3 outlines each loyalty phase, showing the progression through

the phases and the characteristics of each phase.

27
 Table 2.3: A four phase progressive loyalty development framework

Loyalty Characteristics of the phase

Phase
Cognitive Brand attribute information processing indicates that one brand is
loyalty preferable to its alternatives.
This state is built on brand belief only, from prior or vicarious
knowledge or on recent experience-based information.
The consumer either remains at this level, or may enter the
affective domain and remains susceptible to counter-
persuasion.

Affective A liking or attitude toward the brand develops on the basis of the
loyalty outcomes of cumulatively satisfying usage occasions.
This stage exists in the consumer’s mind as combination of
cognitive and affect.
The degree of affect or liking for the brand provides resistance to
counter-persuasion, although customers are still prone to switch
brands.

Conative Behavioral intention is influenced by repeated episodes of positive

loyalty affect toward the brand.
This implies a brand-specific commitment to repurchase.
This is a state of intention or motivation that appears to be a
deeply held commitment to rebuy the brand, and is more like a
desire to repurchase, which may or may not be acted upon.

Action The last or final phase, the motivated intention of conative loyalty
loyalty becomes a readiness to act, accompanied by an additional desire to
overcome obstacles that might prevent that action.
If repeated, action inertia develops, thereby facilitating ongoing
repurchase.

28
Source: (Oliver, 1999)
This framework provides an insight into the attitudes and intentions of consumers.

It suggests that with increasing involvement with a brand, in a series of cumulative

satisfactory episodes that result in an increasingly positive affective intent towards the

brand, that eventually a consumer will enter a state where potential repurchase is akin to

an automatic response.

The benefit of adopting this development framework is that it is potentially

possible to classify and measure each of the loyalty states. Of particular interest in the

current study is the action loyalty phase. The definition and characteristics of action

loyalty related strongly to the definition of customer loyalty used for this study

2.1.2 Customer loyalty in the services context

Bitner (1990) linked customer perceptions of service quality with stated intent to remain

with the organization, willingness to recommend, likelihood to purchase, the likelihood

of switching, and the likelihood of complaining. She found a strong relationship between

perceptions of service quality and these stated intentions, which she terms expressions of

loyalty. In other study examining perceived service quality and measures of behavioral

intent and other actions towards an organizations, Boulding et al (1993) found a positive

29
correlation between service quality and repurchase intentions, willingness to recommend

for long term involvement, paying a price premium, and remaining loyal to the company.

Examining the behavioral anf financial consequence of service quality, Zeithaml,

Berry, and Parasuraman (1996) found that the behavioral consequences of service quality

are either retention or rejection by the customer, leading to financial gains or loses by the

service provider. Behavioral intentions were operationalised as indications of whether

customers would remain with, or defect from the company. Zeithaml, Berry, and

Parasuraman (1996) view loyalty in terms of consumer bonding with organizations.

Behaviors that indicate that customers were forging bonds with a company included

praising the firm, expressing preference for the company over others, continuing to

purchase, increasing the volume of purchase, and agreeing to pay a price premium.

The customer loyalty construct as defined and operationalised in this manner has

become firmly entrenched in marketing literature. This research established the perceived

service quality-customer loyalty link, strongly supporting customer loyalty as a key

measurement of organizational success.

Subsequent studies continued to develop the customer loyalty construct. Fornell,

Johnson, Anderson, Cha, and Bryant (1996), in research published from data collected in

conjunction with the American Customer Satisfaction Index, use customer loyalty as the

ultimate dependent variable because of its value as a proxy fro profitability (Fornell et al.,

1996).

30
 Following Zeithaml, Berry, and Parasuraman (1996), Sirdeshmukh, Singh, Sabol

(2002) define consumer loyalty as a state by an intention to perform a diverse set of

behaviors that signal a motivation to maintain a relationship with an organization,

including allocating a higher share of the category wallet to that service provider,

engaging in positive word of mouth and repeat purchasing.

Jones & Sasser (1995) define customer loyalty as customers’ feelings of

attachment manifest themselves in many form of customer behavior. The paper makes the

important distinction between repurchase intentions, and primary and secondary

behaviors. Repurchase intent is the self-stated intent to continue to patronize an

organization. Primary behavior is the actual repurchasing behavior that customer engage

in, which includes frequency and recency or purchase, the amount purchased, remaining

with the organization, and length of association. Secondary behaviors, such as customer

referrals, endorsements, and word of mouth are those behaviors that result from a sense

of attachment to and affection for an organization. These behaviors would be those

expected from a consumer considered to be in the action loyalty phase of customer

loyalty, proposed by Oliver (1999). These secondary behaviors are extremely important

forms of consumer behavior for a company and are taken to represent the behavior of a

loyal customer.

31
More free assignment, please visit: www.scribdblog.com

32
Ganesh, Arnold, and Reynolds (2000) define loyalty as a combination of both

commitments to the relationship and other overt loyalty behavior. They establish an

important distinction. Loyalty behaviors are classified as either or passive loyalty

behaviors. Active loyalty behaviors are a customer’s proactive behaviors or behavioral

intentions that require conscious and deliberate effort to undertake (Ganesh, Arnold, and

Reynolds, 2000). These behaviors include repeat patronage, positive word of mouth and

expansion of service usage. Passive loyalty behaviors are those behaviors that result from

a state of resistance to change to the exiting relationship. These behaviors include

resistance to switching despite significant changes to the service relationship or service

environment, price insensitivity, and self-stated retention.

In summary, customer loyalty is an important consideration that service firms

must make. Customer loyalty is manifest by primary and secondary behaviors. Primary

behaviors include the actually purchase behaviors that customers engage in. secondary

behaviors are associated with attitudinal outcomes of the customer relationship with the

service organization. These secondary behaviors can be defined as active or passive

manifestations of customer loyalty. The attitudinal outcomes associated with the

secondary behaviors exist in the form of affective attachment to the organization or

motivation to remain with the organization.

33
2.2 Trust

Moorman et al (1992) define trust as “the willingness to rely on an exchange partner in

whom one has confidence”. The nature of service offerings means that service consumers

typically pay in advance to buy a firm’s promise and, therefore, must be willing to rely on

the firm to delivery its promise (Berry, 1996). Trust is considered to be a pre-requisite for

loyalty, especially in the risk-dominated cyberspace where transactions are conducted at a

distance (Reichheld & Shefter, 2000). The maintenance of consumer trust in the retail

banking industry is of considerable importance as it can impact on the likelihood of

retaining existing customers (Morgan and Hunt, 1994) and attaining new ones.

Furthermore, trust in a bank can also be more important to a bank customer than price.

Customer perception of a firm’s trustworthiness is valuable not only in terms of

satisfying and retaining existing customers but also in attracting new customers through

word-of-mouth marketing. According to Jones & Sasser (1995), word-of-mouth

marketing plays a major role in acquiring new customers. Because of the high level risk

perception inherent in service offerings, potential customers are more likely to seek

34
personal recommendations when choosing service providers than relying on information

provided by the firms. In many cases, recommendations given by a colleague can

significantly reduce a person’s perceived risk in selecting an unfamiliar service

organization (Bowen & Shoemaker, 1998). A customer, when recommending a service

provider to a third party, undertakes a certain level of risk on his or her credibility toward

the third party that is likely to erode if the fails to back up the recommendation (Foster &

Cadogan, 2000). Therefore, customer perception of the firm’s trustworthiness, which

usually reduces the perceived risk of recommendation giving, will increase the likelihood

of customers suggesting the firm to others (Foster & Cadogan, 2000).

2.2.1 Attributes of trust

Bitner (1995) suggest that keeping promises is crucial to the development of a mutually

beneficial relationship between customers and service providers. In order to build a

trusting customer relationship, a service provider must demonstrate both its ability and

willingness to deliver on what customer construe as has been promised, whether

explicitly or implicitly (Bhatty et al, 2001). Therefore it is important that the firm can

understand and manage the types of expectations that have been created in its customers

(Bhatty et al, 2001). The firm then needs to consistently meet or exceed its customers’

expectations with regards to its performance, at the same time promoting relationship-

building behaviors in order to win customer trust, which is the basis of true loyalty

(Bhatty et al, 2001).

35
 Given that the relationship between a business and its customers is formed, and

maintained, within a commercial context, the existence of the relationship depends,

ultimately, on the commercial benefits that each party receives. Business organizations

attract their customers by offering, fist of all, a bundle of benefits that are built around

their core competencies. Thus, a firm must be able to promise and deliver a desirable

level of professionalism in order to encourage repeat patronage and to develop customer

relationship and loyalty. Therefore, the professional aspect of a customer-service provider

relationship is more important than its interpersonal element (Bhatty et al, 2001).

An empirical study by Pressey & Mathews (2000) confirms that the level of

professionalism a retailer can offer to its customers correlates positively with the level of

trust the customers have on the firm’s ability to deliver its promises. Therefore, it is

important that a firm seeks to strengthen customer perception of its ability to perform as

well as its reliability or, in other words, its ability to consistently satisfy the customers

over a long time horizon. According to Bowen & Shoemaker (1998), the importance of

this reliability dimension of trust is that it cannot be easily duplicated by competitors,

thus can provide the firm with a more powerful competitive advantage.

From a relationship marketing perspective, a service provider’s reliability reflects

not only through its ability to deliver service but also through its ability to solve any

36
problems with customers that are bound to occur from time to time. In a long-term

relationship, the existence of conflicts is inevitable. However, it is the resolution of such

conflicts that can be constructive or destructive to the relationship. From a customer

perspective, a strong relationship with a service provider offers the assurance that the

firm will be accessible when something goes wrong (Kandampully, 1998). Loyal

customers assume responsible behaviors from their firms, especially in unexpected

circumstances (Selnes, 1998). Therefore, effective problem handling that satisfies the

customers will increase their trust in service providers, while attempts to suppress

conflict with customers will eventually lose out on the vitality and cooperativeness of

customer relationships (Selnes, 1998).

Furthermore, Morgan & Hunt (1994) express the view that trust only when a

customer has confidence not only in a firm’s ability to perform consistently but, also in its

integrity. Hence, a firm’s honesty, as perceived by its customers as honest n its dealings is

more likely to enjoy strong and lasting relationship with the customers (Bhatty et al,

2001).

In summary, trust can be considered as a function of consumer perception of a

retailer’s integrity as well as its ability to perform its services, to keep its promises and

commitment and in general to “do the right things” consistently.

37
2.3 Commitment

A study by Morris et al. (1999) indicates that the level of trust customers invest in a firm

correlates positively with the level of commitment maintained by both parties through

shared values and relationship termination costs. Commitment plays a central role in the

relationship marketing paradigm (Morgan & Hunt, 1994), and has been identified as an

important dimension of customer-service provider relationship quality (Wong & Sohal,

2002).

Conceptually, commitment differs from loyalty in that it is though of in purely

cognitive terms that describe a consumer’s attitudinal attachment to a company (Pitchard

et al, 1999). For example, Moorman et al, (1992) define commitment as “an enduring

desire to maintain a valued relationship”. Thus, commitment is enduring and implies a

positive evaluation of a long-term relationship (Bowen & Shoemaker, 1998; Moorman et

al, 1992; Morgan & Hunt, 1994). Consequently, commitment is often seen as a key to

long-term customer retention (Amine, 1998).

38
 Bendapudi & Berry (1997) argue that relationship that customers maintain with a

service provider can be constraint-based (having to), or dedication-based (wanting to),

leading to different types of relationships of different natures and relationship outcomes.

For example, a dedication-based (committed) relationship manifest itself through

cooperation and advocacy (i.e. recommendation), in addition to repeat patronage

(Bendapudi & Berry, 1997). Stobacka et al, (1994) suggest that commitment refers to

adaptation process resulting from relevant parties’ intentions to act and positive attitudes

toward each other. The notion of commitment entails the belief by both parties that a

lasting relationship is important as to warrant the investment of efforts and resources, and

the acceptance of short-term sacrifices in order to realize long-term benefits and to ensure

that the relationship endures in the long run (Bowen & Shoemaker, 1998; Morgan &

Hunt, 1994). In this sense, commitment can be considered as pledge of relational

continuity (Oliver, 1999).

Commitment has also been shown to be a good predictor of customer future

intentions and loyalty (Baldinger & Rubinson, 1996); Park & Kim, 2003). According to

Wong & Sohal (2002), a higher level of commitment leads to a compelling to make the

relationship mutually satisfying and beneficial. These authors point out that committed

customers tend to perceive more value in the relationship with the firms they patronize,

thus are more willing to take actions in favour of these firms in return for the benefits

received. Therefore, the behaviors of committed customers bring more benefits to a firm

39
than the behaviors of regular, but not committed customers. As such, commitment is

often seen as the driving force behind many forms of consumer behaviors.

Thus, by developing a high level of commitment among its customers, a firm can

make their purchase patterns more predictable and improve customer retention (Amine,

1998). For example, Bowen & Shoemaker (1998) found commitment to positively

influence the incremental volume of business a loyal customer is likely to bring to a

service provider. Amine (1998) concludes that the notion of commitment is critical to a

better understanding of the psychological processes underlying repurchase behavior, and

is useful to distinguish true customer loyalty from other forms of repeat patronage.

Moreover, while repurchase behavior may be achieved through satisfaction, it is

commitment that leads to what is known as “partnership” behaviors (Curasi & Kennedy,

2002; Heskett, 2002). Specifically, White & Schneider (2000) propose that commitment

influences numerous consumer behaviors such as considering alternative firms before

making purchase (environmental scanning), purchasing exclusively from a firm

(relationship enhancement), and providing word-of-mouth recommendations (advocacy).

Empirical research by Bowen & Shoemaker (1998) identifies a strong and

positive relationship between customer commitment and their willingness to perform

such behaviors. Committed customers are also more willing to corporate with their firms

to resolve problems that might occur, as opposed to exiting from the relationship, and to

use such problem solving as a basis for new understanding (Bowen & Shoemaker, 1998).

40
Amine (1998) and Pritchard et al, (1999) postulate that commitment manifest itself

through a resistance to change. Therefore, loyal customers who are committed to a firm

become reluctant to consider other available alternatives. This is consistent with one of

the findings in Bhatty et al. (2001) which indicate that 43% of loyal customers would not

buy from their retailers’ competitors.

2.3.1 Attributes of commitment

Amine (1998) contends that customer commitment may be caused by affective reasons,

such as perceived value or switching costs. Park & Kim (2003) echo this view, suggesting

that customer commitment to a business firm is influenced by both emotional (i.e.

effective) and judgmental (i.e. calculative) elements. Affective commitment is considered

to be more powerful than calculative commitment in the development of true loyalty,

because it is less likely to be affected by contingent events that may hinder the short-term

benefits of repeat patronage (Amine, 1998). Hence, affective commitment is more

reliable as an indicator of true customer commitment.

Park & Kim (2003) further argue that customer satisfaction with service quality,

which is part of overall satisfaction, and customer perception of relational benefits, which

are the benefits received from long-term relationships over and above core service

performance, are key to customer commitment to the retail banking. Similarly, Amine

(1998) expresses the view that consistent purchasing behavior is dependent primarily on

41
consumer perceptions of the benefits that result from remaining in a relationship with a

firm. On empirical study (Bowen & Shoemaker, 1998) confirms that benefits are one the

most important determinants of customer commitment to a service provider. Therefore,

customer perception of relational benefits can be considered as an important dimension of

their commitment to a business firm.

Commitment has also been found to be influenced by consumers’ perceived

differences among competing alternatives (Amine, 1998). Oliver (1999) observes that

customers who are loyal to a firm hold a strong belief that the firm continues to represent

the best alternative. To this extent, it can be argued that commitment is a function of

consumer perceptions of the degree to which a firm represents the best available choice.

2.3.2 The linkage between customer commitment and customer loyalty

The definition and conceptualist of customer loyalty in the previous section specifies

commitment as a key characteristic of action loyalty. Conceptually commitment requires

examination because of the long-standing issue of the link between commitment,

behavioral intentions, and subsequent action, and their relationship with loyalty.

Loyalty and commitment are to some synonymous and represent each other.

There is a distinction between loyalty and related concepts such as commitment.

42
Commitment serves as a precursor to a loyal attitude. Commitment is the emotional or

psychological attachment to a brand that develops before a customer can determine that

repeated purchase is the outcome of a sense of loyalty (Pritchard, Havitz, and Howard,

1999). Commitment ties an individual to a behavioral disposition. Commitment can also

be conceptualized as a relationship. For example, an employee’s commitment to a job is

the relative strength of an individual’s identification with, and involvement in a particular

organization. This implies intent to remain with the organization. Commitment consist of

the employee’s beliefs and opinions about the organization and also the level of intent to

act in a particular way (Pritchard, Havitz, and Howard, 1999)

In summary, commitment can be considered as a function of customers’ personal

attachment to a retailer, as well as their perception of the company in relation to its

competitors, and their orientation towards a long-term relationship with the retailer.

2.4 Conflict Handling

In interpersonal communication, conflict occurs when an individual perceives

incompatibility between his or her own personal goals, needs, or desires and those of the

other party (Pruitt & Rubin, 1987). In dealing with conflict, people use different

strategies to accomplish their goals. Dwyer et al. (1987) defined conflict handling as the

ability of each supplier’s to minimize the negative consequences of manifest and

43
potential conflicts. Conflict handling reflects the supplier’ to avoid any potential conflict,

solve that particular conflict before they create problems and the ability to discuss the

solutions openly when the problem arises. Conflict handling requires cooperative

behavior from exchange partners. According to Evans & Beltramini (1987), in a

negotiation setting, cooperative versus competitive intentions have been found to be

linked to satisfactory problem solution. In short, good conflict resolution will result

relationship quality positively. Conflict handling is an important relationship builder.

Even though it is difficult to service industries especially in banking sector to achieve

zero service failure all a time, but it is so important that the particular banks put in place

effective conflict resolution or problem solving machinery.

A major problem which had been resolved satisfactorily may leave in its wake a

happy and loyal customer, but maybe minor issues if not handled carefully will result in

defection. A more excellent approach, for example proactive in planning and

implementations includes, identifying potential conflict, solving conflict before they

manifest, avoiding potential conflict and blocking them. Those efforts could bring the

better relationship and loyalty to the particular bank or service firm (Ndubisi, 2007).

Ndubisi & Wah (2005) found a significant relationship between conflict handling and

customer loyalty, indirectly through trust and perceived relationship quality. As

mentioned earlier, the ability of the product or service provider to handle conflict well

will also directly influence customer loyalty.

44
2.5 Value Perception

In a hyper-dynamic and competitive marketplace, increasingly demanding consumers

expect their firms to deliver ever-increasing value at lower process (Slater, 1997).

Parasuraman (1997) contends that the notion of customer value is dynamic because the

criteria that consumers use to judge value are likely to change both over time and over the

various stages of a customer’s relationship with a company (e.g., fist-time vs. long-term

customers). Consistent with this view, Vandermerwe (2003) argues that customer value

should be defined by the customers, rather than by the firm. Furer et al. (2002) argue that

the importance and perception of service quality are highly dependent on customer’s

values and beliefs that might change from one cultural to another. Banks service quality

is commonly noted as a critical prerequisite for satisfying and retaining valued customer

(Cronin & Taylor, 1992; Taylor and Baker, 1994).

Customer value perceptions is also regarded as a key determinant of overall

satisfaction (Cronin et al., 2000), as well as customer loyalty (Parasuraman & Grewall,

2000). Bhatty et al. (2001) conclude that firms need to continuously seek ways to

improve their value propositions in order to ensure customer satisfaction, loyalty, and to

encourage repeat patronage.

2.5.1 Attributes of customer value perception

45
From a consumer perspective, value is the benefits, such as quality merchandise and

caring service, that are received in relation to the total cost of acquisition, which includes

monetary cist (e.g., price) and non-monetary costs (e.g., shopping time) (Berry, 1996).

Another explanation of the importance of values in judging the level of service quality

comes from means-ends models of customer value. These models are based on the

assumption that customers acquire and use products or services to accomplish favorable

ends. Values are defined in term or personal values, mental images, or cognitive

representations underlying customer’s needs and goals (Gutman, 1982; Wilkie, 1994).

Huber et al. (2001), for example, state that the means-ends theory postulate that

linkages between product attributes, consequences produced through consumption, and

personal values on consumers underlie their decision making process (Gutman, 1991).

Products ands services are the means, while customers’ personal values are the ends. An

individual’s evaluation of the quality of a product or service is partly based on whether

that product or service enables him or her to achieve his or her desired end states.

Naceur and Azaddin (2005) have mentioned in their article that values and image

were the most important dimensions of service quality in UAE conventional banks. On

the other hand, personal skills and values were the only significant service quality

dimension among the customers of Islamic banks. Customers of Islamic banks are most

46
concerned with the impression of sincerity, trust and caring given to them by their service

providers.

2.6 Empathy

Empathy is the ‘capacity’ to share and understand another’s ‘state of mind’ or emotion. It

is often characterized as the ability to “put oneself into another shoes”, or in some way

experience the outlook or emotions of another being within oneself. The basic idea of

empathy should be characterized is that by looking expressions of the people facial or

body movement, or by hearing their tone of voice, which will immediate sense on how

they feel (Ndubisi, 2004). Empathy has the added value of reducing reliance on legal

governance, since exchange partners who are governed by the principal of empathy are

more likely to treat others in the manner they would like to be treated.

The importance of relationships for collectivist countries and countries with a

long-term orientation, empathy is important for services providers to build long-term

relationships (Raymond & Rylance, 1995). Furthermore, Hofstede’s, masculine or

feminine dimensions is closely linked to the empathy dimension of service quality.

Because empathy is considered a feminine trait (Kettinger et al., 1995; Kunyk & Olsen,

47
2001) feminine cultures are likely to place higher value on empathy, for example in US

services advertising is more likely to communicate the empathy dimension of service

quality than Korea service advertising.

SERVQUAL (Parasuraman et al., 1985,1988) is the most widely used measure of

service quality within service industries. SERVQUAL consists of five dimensions;

(1) Tangibles – physical facilities, equipment and appearance of personnel.

(2) Reliability – ability to perform the promised service dependably and accurately.

(3) Responsiveness – willingness to help customers and provide prompt service.

(4) Assurance – knowledge and courtesy of employees and their ability to inspire

trust and confidence

(5) Empathy – caring, the individualized attention the firm provides its customers.

As mentioned by the Parasuraman et al., 1985, 1988) empathy is one of the

important elements to measure the service quality in service industries area. It’s so

important to the each banks manager to recruit staff with social skills that will assist the

development of long-standing relationship with customers. And the most important thing

is that bank should provide reliable services in order to achieve high level of customer

satisfaction, an antecedent of sustainable competitive advantage.

48
 Empathy also is very higher significant associated with willingness to recommend

after allowing for the effects due to overall satisfaction and affective attitude (Buamann et

al., 2007). In this case, we can say that once the customers feel satisfied with the services

which provided to them, they will recommend to the others about the particular firm,

especially in banking sector which really need high level of customer satisfaction to

ensure that the bank can enhance their business. High satisfaction and affective attitudes

is in turn strongly associated with customer’s future behavioral intentions in terms of

willingness to recommend and willingness to remain a customer. If the company needs to

grow is a customer’s willingness to recommend, as suggested by Reichheld (2003), then

effective attitude, overall satisfaction.

Naceur & Hussein (2003) have stated that the human skill dimensions were found

to be more significant than the dimensions of tangibles and empathy. In short, its means

that people more prefer to look on the human skills in the service quality. For example, in

Thailand, Korea and Indonesia, customer place greater emphasis on the quality of contact

than on the product quality (Bang et al., 2005).

In summary, empathy not only increase the level and quality of the relationship

between customers and the organization, but also empowers the relationship to deliver

superior value, which in result customer’s repeat purchase, customer retention, and

sustained loyalty.

49
 Methodology
3
3.0 Introduction

The chapter begins by describing the research design, followed by a discussion of the

sample involved in the study in explanation of how the theoretical constructs were used.

This will include a detailed description of how the methods of analysis were applied to

determine the reliability and validity of the measurement instrument.

3.1 Research Design

50
This section discusses about the sampling techniques and population. Cross sectional

survey approach will be used in gathering the data for the purpose to meet the research

objective and finally providing findings for this research. The major objective in this

research is to determine whether customer loyalty is being affected by the concept of five

underpinnings of the relationship marketing. The dependent variable is customer’s loyalty

while the independent variables are trust, commitment, conflict handling, values, and

empathy.

One of the key objectives of the research design is to understand and describe the

dependent variable. It other words, it is the main variable that lends itself for

investigation as a viable factor. By the analysis of the dependent variables, it is possible

to find the answers or solutions to the research problem.

The most universally used tool to collect beliefs and a attitudes is the self

reporting technique, most commonly in the form of a questionnaire (de Vaus, 2002;

Malhotra et al. 1996). This is partly due to the low costs involved, and also the relatively

low demands it places on the respondents (Zikmund, 2000; Malhotra et al. 1996).

3.2 Sampling Design

51
The main aim of the sampling method used was to capture a representative cross-

sectional sample of the total population (Neuman 2003; Cavana et al. 2001). The large a

systematic sample, the more likely it will replicate its population (Malhota et al. 1996). A

large sample will also offers improved statistical power in that the ability of a statistical

test to detect significant associations or differences or related to sample size (Loewenthal

1996). In the unrestricted probability sampling design, more commonly known as simple

random sampling, every element in the population have a chance of being selected as a

subject. For this research, students of Universiti Utara Malaysia (UUM) and employees

of Permintex Industries Sdn. Bhd.are chosen as the respondents of the research.

When we draw the elements from the population, it is likely that the distribution

patterns of the characteristic we are interested in investigating in the population are also

similarly distributed in the subjects we draw for our sample. This is known as simple

random sampling. It also has least bias and offers the most generalisability. Based on

Cavana et al. (2001) sample size decision table, the author has stated that for the 300

population, the best sample size that needs to be chosen is 169 respondents.

3.3 Research Samples

Based on Cavana et al. 2001, population refers to the entire group of people, events or

things of interest that the researcher wishes to investigate. An element is a single member

52
of the population. The sampling frame is a listing of all the elements in the population

from which the sample is drawn. The sampling frame is sometimes referred to as the

population frame. Then, a sample is a subset of the population. It comprises some

members selected from the population. In short, it is not all the elements of the

population would form the sample.

The responded targeted for the study were students in UUM and employees of the

Permintex Industries Sdn. Bhd. There were no formal requirements or qualifiers for the

population as long as they are bank users. A total of 70 set of self administered

questionnaire were distributed at different location across the campus are of UUM,

whereas 80 set of questionnaire were distributed to the Permintex Industries Sdn. Bhd.

3.4 Data collection

While several data collection techniques have been developed and applied across

different disciplines, market survey has been identified as the most popular means of

generating primary data in business research (Zikmund, 2000). For marketing

researchers, the self-administered questionnaire survey has proven to be an important and

useful instrument (Ranchhod & Zhou, 2001).

For the purpose of this study, although there were many possible ways to

communicate with respondents, such as online focus groups and also chat rooms, the self-

53
administrated questionnaire was used. This method is considered to be the most popular

method used given the time and budget constraints of the project. More importantly, since

the questionnaire was highly structured and relatively straightforward, respondents will

be able to complete the survey on their own without much help from the researcher.

Therefore, the use of a self-administered questionnaire helps to increase convenience for

the respondents to participating in the survey.

3.5 Question Design

A questionnaire design is an integral part of the research project. There are two major

types of question in a questionnaire. Firstly, the Open-ended question allow respondents

to answer in any way they choose. When using open ended questions, responses need to

be coded for content analysis (Miles & Huberman, 1994; Ryan & Bernard, 2000).

Moreover, these coded data are not suited to powerful parametric statistical analysis

(Malhotra et al. 1996). In addition, open questions require more effort from respondents

and more space on the questionnaire for responses, and are therefore unsuited as the key

source of questioning in mail based survey. The respondents’ effort required to complete

open ended questions potentially leads to articulation bias, where attitudes and opinion

are over or under emphasized due to the differing amount of detail given by respondents.

As confirmed in the results of the questionnaire, in some instances data yielded from

open questioning can be irrelevant.

54
 Secondly, closed questions offer several practical advantages that are well suited

to the research problem and methodology. They are ideal because they are quick, require

less effort for respondents to complete, and response categories can clarify the meaning

of the question being answered, and less articulate respondents are not disadvantaged.

Closed questions yield responses that are more easily coded and analyzed (de Vaus, 2002;

Dillman, 2000; Sekaran, 2003) because responses are limited to alternatives stated

(Malhotra et al., 1996).

A questionnaire was used as the main form of data collection in this research. The

questionnaire was distributed to the UUM students and employees of Permintex

Industries Sdn. Bhd. using convenience method. A covering letter was attached together

with the questionnaire by explaining the purpose of this research, assuring the

confidentiality of their response and instructing them to complete the questions. The

questionnaire consists of two (2) parts. Part One is related to the demographic

measurement while Part Two asked questions related to the dimension of relationship

marketing underpinnings towards customer loyalty in banking sector.

In the first part, the respondent’s demographic profiles were asked such as gender,

age, race, religion and occupation. The second parts is consists of 30 questions. The

entire questions were based on the dimension of the relationship marketing

underpinnings. This part measures the impact of relationship marketing on customer

55
loyalty. This part was divided in five (5) dimensions. The first dimensions, “trust”,

consists of six (6) questions and were adopted from Ndubisi (2005). The second

dimensions which consists four (4) questions that measure “commitment” were adopted

also from Ndubisi (2005). The third dimension that measure “conflict handling”

contained five (5) questions which were adopted from Ndubisi (2005) and Naceur &

Azaddin (2005). On the other hand, the fourth dimension which is “values” contained

five (5) questions and was adopted from Naceur & Azaddin (2005). The fifth dimension,

“empathy”, contained five (5) questions which were adopted from Huseyin et al (2005).

Customer loyalty dimension consists of five (5) questions, adopted from Ndubisi (2005)

and Beerli et al (2004).

More free assignment, please visit: www.scribdblog.com

3.6 Scale Type Used

Likert scales were the primary method of gaining respondent attitudes throughout the

questionnaire. One advantage of the Likert Scale method is that it can produce scales that

have good reliability and validity (Bearden & Netemeyer 1999; Blankenship et al 1998;

Churchill & Peter 1984). Also being an example of closed questioning, these questions

are comparatively simple and require relatively low involvement, meaning that

respondents are more likely to start and complete the questionnaire (Blanenship et al

1998; Neuman 2003). Furthermore the Likert scale is the most generally useful in the

56
scaling of responses with regards to psychological traits. (Barden & Netemeyer 1999;

Nunnally 1978).

While the Likert scale is an ordinal scale (Malhotra et al., 1996; Neuman, 2003),

it is usually treated as an interval measure (Malhotra et al., 1996; Sekaran, 2004). This is

because the same pattern typically emerges from its summated responses, irrespective of

the data being treated as ordinal or interval (de Vaus, 2002; Malhotra et al., 1996). While

treated Likert scale as interval data may lead to some small error, it is offset by the ability

to use more powerful, more sensitive and more clearly interpretable statistics with known

sampling error, and a more advanced means of controllong extraneous variables (de Vaus,

2002; Malhotral et al.,1996).

All scale questions in the questionnaire used numbered scales. Numbered scale

points were not only employed to facilitate data analysis, but also due to the intention to

assume interval0scale data (Zikmund, 2003). Although numbered scales do not

automatically foster higher reliability (Bearden & Netemeyer, 1999). According tu

Nunnally (1978), respondents’ use the numbers as a clue on how to think about the

questionnaire question and therefore find it easier to respond.

57
 Each item in Part Two utilized a five point Likert scale that anchors from one (1)

(strongly disagree), two (2) (disagree), three (3) (no opinion), four (4) (agree) to five (5)

(strongly agree).

Table 3.1: Summary of the questionnaire

Variables No of Items Items

Section A: demographic
Gender 1 Section A, Item 1
Age 1 Section A, Item 2
Race 1 Section A, Item 3
Religion 1 Section A, Item 4
Education level 1 Section A, Item 5
Occupation 1 Section A, Item 6
Monthly income 1 Section A, Item 7
Section B:
Trust 6 Section B, Item 1-6
Commitment 4 Section B, Item 7-10
Conflict handling 5 Section B, Item 11-15
Values 5 Section B, Item 16-20
Empathy 5 Section B, Item 21-25
Customer loyalty 5 Section B, Item 26-30

58
More free assignment, please visit: www.scribdblog.com

3.7 Pilot Test

A questionnaire should be piloted with a reasonable sample of respondents who

represents the target population or who closely resemble the target population. A pilot

study is to detect weakness in design and instrumentation and to provide proxy data for

selection of profitability sample (Cooper et al., 2006). A total of 40 respondents are

chosen for the pilot test. The questionnaire were distributed randomly among UUM

students and also employees of Permintex Industries Sdn. Bhd. in order to determine the

reliability of the instrument that is used to measured the variable of this research before

performing data collection in order to achieve the objectives.

3.8 Reliability Test

59
Based on Cavana et al. (2001), the reliability of a measure is established by testing for

both consistency and stability. Consistency indicates how well the items measuring a

concept hang together as a set. Cronbach’s alpha is a reliability coefficient that indicates

how well the items in a set are positively correlated to one another. Cronbach’s alpha is

computed in terms of the average intercorrelations among the items measuring the

concept. This coefficient can hold a value of 0 to 1. Generally an alpha coefficient of 0.60

are considered to be poor, those in the 0.70 range acceptable, and those over 0.80 are

considered good. The results of the reliability test of the pilot instrument fall between

0.92 and 0.47. This result is shown in Table 3.2 below. As what has been indicated, there

are five (5) dimensions in relationship marketing namely, trust (6 items), commitment (4

items), conflict handling (5 items), values (5 items) and empathy (5 items) and six (6)

items for customer loyalty itself.

Table 3.2: Reliability statistic for the pilot test

Item Number of Item Cronbach’s Alpha

Trust 6 0.708
Commitment 4 0.468
Conflict handling 5 0.796
Values 5 0.734
Empathy 5 0.814
Customer’s loyalty 5 0.919

60
3.9 Statistical Methods

In research, scientific data were search, which on analysis; provide answer to the research

questions. There are many soft wares available for analyzing social science study. In this

research, data was analyzed using the Statistical Package for the Social Science 12.0

(SPSS) computer program. The use of SPSS required the data collected to be numerically

coded. Numerical codes were assigned to the majority of question prior to the

administration of the questionnaire. In this research, the responses and information

collected from survey was tested using statistical techniques such frequencies

distribution, t-test, one way ANOVA, correlation and multiple regression analysis.

3.10 Chapter Summary

This chapter provided details of the questionnaire. It has discusses development of the

questionnaire, creation of the data set and question purpose. In addition it has aligned

questions with the aims and objectives of the research and literature reviewed. The

analysis of the result from the survey is presented in the next chapter.

61
 Data Analysis and
4
Findings
4.0 Introduction

62
This chapter presents the results of the data analysis. The aim of this chapter is to report

the findings of the research. The data analysis is therefore structured around the

hypotheses. Data were analyzed using several methods such as descriptive statistics

(frequencies and means). One way-ANOVA, t-test, correlation and regression were used

to test the hypotheses.

4.1 Descriptive Statistics of Data Collection

Descriptive statistics are used to explore the data collected and to summarize and

describe those data (Coakes & Steed, 2007). Descriptive statistics may be particularly

useful to make some general observations about the data collected, for example,

demographics questions. The demographics factors in this research are gender, age, race,

religion, highest educational qualification, occupation and average monthly income.

4.1.1 Gender of Respondents

Table 4.1 shows the gender of the respondents. The table shows that most of the

respondents are female (58.7% or 81 respondents) while 41.3% (57 respondents) are

male.

Table 4.1: Gender of the respondents

Gender Frequency Percent

Male 57 41.3
Female 81 58.7
Total 138 100.0

63
4.1.2 Age of Respondents

The result of respondents’ age is shown in Table 4.2. The table shows that 73.2% of the

respondent (101 respondents) are at the age of 20-39 years old, followed by respondent at

the age between 40- 59 years old with 20.3% (28 respondents), 5.8% (8 respondents)

were at the age below 20 years old. The remaining of the respondents were above 60

years old.

Table 4.2: Age of the respondents

Age Frequency Percent

Below 20 years 8 5.8

20 till 39 101 73.2
40 till 59 28 20.3
60 and above 1 0.7
Total 138 100.0

4.1.3 Race of Respondents

The result of respondents’ race is shown in Table 4.3. The finding shows that 68.8% (95

respondents) of the respondents were Malay, while 22.5% (31 respondents) were Chinese

and Indian 8.7% (12 respondents) were Indian.

Table 4.3: Race of the respondents

Race Frequency Percent

Malay 95 68.8
Chinese 31 22.5

64
 Indian 12 8.7
Total 138 100.0

4.1.4 Religion of Respondents

Table 4.4 shows the religion of the respondents’. It was found that most of the

respondents’ are Muslims with 68.8% (95 respondents). On the other hand, 22.5% (31

respondents) are Buddhist while 8.7% (12 respondents) are Hindus.

Table 4.4: Religion of the respondents

Religion Frequency Percent

Islam 95 68.8
Buddhist 31 22.5
Hindu 12 8.7
Total 138 100.0

4.1.5 Highest Educational Achieved by Respondents

The results of respondents’ highest educational achieved by the respondents are shown in

Table 4.5. The data in the table shows that 56.5% or 78 respondents hold a first degree.

On the other hand, 21.7% (30 respondents) were HSC/Diploma holder, while 10.1% or

14 respondents hold a postgraduate degree. 9.4% (13 respondents) achieved secondary

education level and only 0.7% (1 respondent) achieved primary education. 2 respondents

(1.4%) indicated that they had other qualification.

65
 Table 4.5: Highest Educational Achieved by respondents

Highest Educational Frequency Percent

Primary 1 0.7
Secondary 13 9.4
HSC/Diploma 30 21.7
Degree 78 56.5
Postgraduate 14 10.1
Total 138 100.0

4.1.6 Occupation of Respondents

The result of respondents’ occupation is shown in Table 4.6. The table shows that 58.0%

or 80 respondents are working in private sector, 31.9% (44 respondents) are students,

5.8% (8 respondents) had their own business while each the rest is government and others

gained the same value which is 2.2% or 3 respondents each. 2.2% or 3 respondents work

in the government sector and other occupation.

Table 4.6: Occupation of the respondents

66
 Occupation Frequency Percent

Government 3 2.2
Private 80 58.0
Own business 8 5.8
Student 44 31.9
Others 3 2.2
Total 138 100.0

4.1.7 Income of Respondents

Table 4.7 shows the income of respondents. It was found that most of the respondents’

income is below than RM2000.00 per month with total 50.7% or 70 respondents. On the

other hand, 40.6% (56 respondents) had income of RM2000.00 between RM3999.00

monthly. 7.2% (10 respondents) had income RM4001.00 between RM5999.00 monthly

while 1.4% or 2 respondents gained RM6000.00 and above monthly.

Table 4.7: Income of the respondents

67
 Income Frequency Percent

Below than RM2000.00 70 50.7

RM2000.00-RM3999.00 56 40.6
RM4001.00-RM5999.00 10 7.2
RM6000.00 and above 2 1.4
Total 138 100.0

4.2 T-test of Data Collection

A t-test is used to determine whether there is a significant difference between two sets of

scores (Coakes & Steed, 2007). Three main types of t-test may be applied; a) One

sample, b) Independent groups, and c) Repeated measures. In this research, independent

samples test will be used to test whether ‘gender’ is significant towards customer loyalty

in banking sector.

The result of the t-test is shown in Table 4.8 below. As shown, the difference in

the mean of 3.93 and 3.83 with standard deviation of 0.755 and 0.765 for male and

female on customer loyalty in banking sector were insignificant. Therefore, we can

assume that there is no significant different of customer loyalty between male and female

respondents.

Table 4.8: Independent samples test between gender and customers’ loyalty

68
 Gender Mean Std. Deviation t Significant
Customer
Loyalty Male 3.9333 0.75530 0.713 0.477
Female 3.8395 0.76513

4.3 Hypotheses Testing

Analysis of variance (ANOVA) is used to compare differences between more than two

means at a time. Before conducting ANOVA, the necessary assumptions must be met.

The assumptions for ANOVA are the same as those for the t-test. The two assumptions of

concern are; a) Population normality- Populations from which the samples have been

drawn should be normal. Check this for each group using normality statistics such as

skewness and Shapiro-Wilk and b) Homogeneity of variance-the scores in each group

should have homogeneous variances. As with the t-test, Levene’s test determines whether

variances are equal or unequal (Coakes & Steed, 2007).

The results of ANOVA are shown in Table 4.9. In the case of age factor, the F

value 2.339. This F value is not significant at the level 0.076. This implies that there is no

significant different between customers’ loyalty in banking sector and age factor. In the

case of race factor, the F value is 3.578. This F value is significant at the level 0.031. This

implies that there is significant difference in the mean of race factor towards customers’

loyalty in banking sector. Similar result is show when the test was conducted on the

religion of the respondents. The F value of 3.578 is significant at the level 0.031. This is,

there is a significant difference in the mean of religion and customers’ loyalty in banking

sector.

69
 Table 4.9: One-way ANOVA between age, race, religion, education, occupation and

income with customers’ loyalty

F Significant
Age 2.339 0.076
Race 3.578 0.031
Religion 3.578 0.031
Education 0.680 0.639
Occupation 0.360 0.836
Income 0.950 0.418

Furthermore the education factor shows that, the F value is 0.680 and it is not

significant at the level of 0.639. This implies that there is no significant different between

education and customer loyalty in banking sector. The occupation factor shows similar

results. The F value of 0.360 is not significant at the level 0.639. That is, there is no

significant difference in the mean of education and customers’ loyalty in banking sector.

Finally, in the case of income factor, the F value 0.950. This F value is not significant at

the level 0.418. This implies that there is no significant different between customers’

loyalty in banking sector and income factor.

The following part will presents the findings of the research. One way-ANOVA

and t-test were used to determine if there were statistically significant differences in the

70
respondents’ loyalty towards their bank when grouped by five underpinnings of the

relationship marketing.

Hypotheses 1: There is no significant relationship between relationship marketing and

customers’ loyalty

The result from the regression analysis based on five (5) independent variables

which included in underpinnings of relationship marketing against customers’ loyalty can

be seen in Table 4.10. Based on the ‘Model Summary’ proof that the five (5) independent

variables that are entered into the regression model, the R (0.829), which is correlation of

the five (5) independent variables with the dependent variable. After taken all the inter

correlations among five (5) independent variable, the R square (0.687) and square of the

multiple R (0.829)2. In short, we can clarify that 68.7 percent of the five (5) independent

variables influence dependent variables which is customers’ loyalty. Regarding the

ANOVA table, we noticed that F value of 57.882 is significant at the 0.000 level.

Therefore, the result can conclude that with 68.7 percent of the variance (R-Square) in

customers’ loyalty were significant. Therefore, we can conclude that H1 is rejected.

Table 4.10: Multiple Regression Analysis

Model Summary

Model R R Square Durbin-Watson

71
 1 0.829 0.687 1.772

ANOVA

Model F Significant

1 57.882 0.000

Hypotheses 2: There is no significant relationship between trust dimension and

customers’ loyalty

Since both variables are interval, Pearson Correlation test was conducted and the

results are shown in Table 4.11. There is a significant positive correlation between trust

dimension and customers’ loyalty with a significant value of 0.000. Hence we reject the

hypothesis H2. In other words trust dimension and customers’ loyalty are related with a

high relationship (r = 0.720).

72
 Table 4.11: Correlations between trust dimension and customers’ loyalty

Pearson Correlation (r) Significant

Trust 0.720** 0.000

**Correlation is significant at the 0.001 level (2-tailed)

Hypotheses 3: There is no significant relationship between commitment dimension and

customers’ loyalty

Since both variables are interval, Pearson Correlation test was conducted, the

results of which are shown in Table 4.12. There is significant positive correlation between

commitment dimension and customers’ loyalty with significant value of 0.000. Hence we

reject the hypothesis H3. In other words commitment dimension and customers’ loyalty

are related with moderate relationship (r = 0.674).

73
 Table 4.12: Correlations between commitment dimension and customers’

loyalty

Pearson Correlation (r) Significant

Commitment 0.674** 0.000

**Correlation is significant at the 0.001 level (2-tailed)

Hypotheses 4: There is no significant relationship between conflict handling and

customers’ loyalty

Since both variable are interval, Pearson Correlation test was conducted, the result

of which are shown in Table 4.13. There is significant positive correlation between

conflict handling and customers’ loyalty with a significant value of 0.000. Hence we

reject the hypothesis H4. In other words conflict handling dimension and customers’

loyalty are related with a moderate relationship (r = 0.681).

74
 Table 4.13: Correlations between conflict handling dimension and

customers’ loyalty

Pearson Correlation (r) Significant

Conflict Handling 0.681**

0.000

**Correlation is significant at the 0.001 level (2-tailed)

Hypotheses 5: There is no significant relationship between values and customers’ loyalty

Since both variable are interval, Pearson Correlation test was conducted, the result

of which are shown in Table 4.14. There is significant positive correlation between values

and customers’ loyalty with a significant value of 0.000. Hence we reject the hypothesis

H5. In other words values dimension and customers’ loyalty are related with a moderate

relationship (r = 0.689).

75
 Table 4.14: Correlations between values dimension and customers’ loyalty

Pearson Correlation (r) Significant

Values 0.689** 0.000

**Correlation is significant at the 0.001 level (2-tailed)

Hypotheses 6: There is no significant relationship between empathy and customers’

loyalty

Since both variable are interval, Pearson Correlation test was conducted, the result

of which are shown in Table 4.15. There is significant positive correlation between

empathy and customers’ loyalty with a significant value of 0.000. Hence we reject the

hypothesis H6. In other words values dimension and customers’ loyalty are related with a

high relationship (r = 0.744).

76
 Table 4.15: Correlations between empathy dimension and customers’ loyalty

Pearson Correlation (r) Significant

Empathy 0.744** 0.000

**Correlation is significant at the 0.001 level (2-tailed)

4.4 Regression Analysis of relationship marketing dimension with customers’ loyalty

The results of regressing the five (5) independent variables against customers’ loyalty can

be seen in Table 4.16. The first table in the output ‘Model Summary’ shows the five (5)

independent variables that are entered into the regression model, the R (0.829), which is

the correlation of the five (5) independent variables with the dependent variable. After all

the inter correlations among the five (5) independent variable are taken into account, and

the R Square (0.687). This is the explained variance and is actually the square of the

77
multiple R (0.829)2. Thus only 68.7 percent of the five (5) variables influence the

dependent variables.

The ANOVA table shows that the F value of 57.882 is significant at the 0.000

level. What the results mean is that 68.7 percent of the variance (R-Square) in customers’

loyalty has been significantly explained by the five (5) independent variables.

The next table, title Coefficients, helps us to see which among the five (5)

independent variables is the most important in explaining the variance in customers’

loyalty. If we look at the column Beta under Standardized coefficients, we see that the

highest number in the beta is 0.266 for trust dimension, which is significant at the 0.001

level. It may also be seen that four (4) independent variables were significant which is

trust, conflict handling, values and empathy dimension.

Table 4.16: Multiple Regression Analysis

Model Summary

Model R R Square Durbin-Watson

1 0.829 0.687 1.772

ANOVA

Model F Significant

78
 1 57.882 0.000

Coefficients

Model B Beta t Significant

Constant -0.212 -0.849 0.397

Trust 0.327 0.266 3.515 0.001
Commitment 0.108 0.109 1.433 0.154
Conflict Handling 0.199 0.190 2.572 0.011
Values 0.172 0.163 2.101 0.038
Empathy 0.273 0.243 2.834 0.005

4.5 Chapter Summary

The five (5) hypotheses proposed earlier were tested. Using a sample of 138 respondents,

data was obtained from the students of University Utara Malaysia (UUM) and employees

of Permintex Industries Sdn. Bhd. The primary objective was to determine the factors

influencing customers’ loyalty towards their bank. Two level of statistical analysis were

conducted with two different steps. The first level involved the use of basic descriptive

statistic. This level of analysis was not intended for hypothesis testing, but rather to

79
enable us to obtain a glance of the basic characteristics of the data. Test level involved

two main statistical analysis; analysis of difference (t-test and One way ANOVA) and

analysis of relationship and influences (Correlation and Regression analysis).

As a conclusion, based on the test conducted, all the hypotheses are rejected.

While the result by regression test shows that the four (4) independent variables namely

trust dimension, conflict handling dimension, values dimension and empathy dimension

were important in determining the factors influencing the customers’ loyalty in banking

sector.

Discussion,
5
Recommendations
&
5.0 Introduction

80
This chapter discusses the results of this research. Some recommendations for the future

research are also suggested. For the purpose of this discussion, this chapter will be

divided into three parts namely, discussion, recommendation for future research and

conclusion.

5.1 Discussion

This research is related with the underpinning of relationship marketing towards

customers’ loyalty in banking sector. This research is an extension of a research

conducted Ndubisi (2007).

The objectives of this study is to examine the concept of five underpinnings of the

relationship marketing such as trust, commitment, conflict handling, values and empathy

towards customers’ loyalty in banking sector. Demographic factors such as gender, age,

race, religion, highest educational qualification, occupation and average monthly income

have been used to explain respondents’ loyalty towards their bank.

This research found that 58.7 percent of respondents are female and 41.5 percent

of respondents are. With respect to age, the largest groups of respondents are in between

20-39 years old group, accounting 73.2 percent. This was followed by 40-59 age groups

81
with 20.3 percent. Majority of the respondents are Malay (68.8 percent) followed by

Chinese (22.5 percent) and Indian (8.7 percent) only. In terms of religion, it was found

that majority of the respondents are Muslim (68.8 percent). The education level of

respondent was impressive with 56.5 percent of respondents are a degree holder and also

pursuing degree program. For the occupation of the respondents, majority of them are

working in private sector with 58.0 percent and followed by 31.9 percent are student. As

for the statistic on the major source of income, 50.7 percent respondent obtained below

than RM2000 or per month and followed by 40.6 percent obtained RM2000-RM3999

monthly.

The results of ANOVA showed that age factor have the F value 2.339. This F

value is not significant at the level 0.076. This implies that age has no significant

different in customers’ loyalty in the banking sector. For the race factor, the F value is

3.578 and significant at the level 0.031. The religion factor shows similar results. The F

value of 3.578 is significant at the level 0.031. Furthermore the education factor shows

that, the F value is 0.680 and it is insignificant at the level of 0.639, occupation factor

shows similar results with F value of 0.360 is not significant at the level 0.639. Finally, in

the case of income factor, the F value 0.950 and it is insignificant at the level 0.418. All

these results show that demographic factor does not fully effect on customers’ loyalty in

banking sector. Only race and religion factor have a significant towards customers’

loyalty in banking sector. Since majority of the respondents were Malay, they maybe

preferred to choose Islamic banking rather than other bank services. They have their own

reason on why to choose to deal with the Islamic banking.

82
 Banking and financial services are an important part of services industry. Usually

satisfied customers will also complain about the services provided by the particular bank.

Now, banks managers knew that delivering quality service to customers is very important

for success and survival in today’s global competitive banking environment. In this

relation, the bank must prepare invaluable information to build strong relationship with

the customers for the purpose of gaining their loyalty and hence preventing them from

switching to other banks. Berry (1983) viewed relationship marketing as a strategy to

attract, maintain and enhance customer relationships. In this relation, customers can be

loyal towards a bank for a number of reasons. This research have identified five (5)

dimension of relationship marketing that will affect the customers loyalty in banking

sector namely, trust, commitment, conflict handling, values and empathy.

In the correlations results, “trust dimension” is positively and highly (correlation

coefficient = 0.720) correlated towards customers’ loyalty. This means that customers

will be loyal to a bank if they trust the bank. This finding was supported by the findings

of Bhatty et al. (2001) and Pressey & Mathews (2000). They explain that business

organizations gain their customers by offering or providing benefits. Thus, a firm should

be able to promise and deliver each promise which had been done in order to encourage

repeat patronage and to develop customer relationship and loyalty. In addition, trust only

will exist if customers have confidence in a firm’s ability to perform satisfactorily. Trust

is a major determinant of relationship quality. Therefore, a firm perceived by its

83
customers as honest in its performance is more likely to enjoy strong and lasting

relationship with their entire customers.

“Commitment” is another factor taken into consideration to assure the customers

loyal towards their bank. In this research “commitment dimension” is found to be

positively and moderately related towards customers’ loyalty in banking sector. The

correlation coefficient is 0.674. This indicates that the respondents whenever they deal

with their banks, they will consider the commitment of the bank employees towards their

services. Wong & Sohal (2002) mentioned that commitment is an important dimension of

customer-service provider relationship quality. Commitment is one of good predictor of

customer future patronage intentions and loyalty. Now we look on the context of the bank

employees. Once they have a responsible or commitment towards their job, they will

perform their job without making any mistakes and can fully concentrate to entertain the

customers. Then, if customers received great services, they will remain loyal to that

particular bank. Similarly, commitment has also been found to be influenced by

consumers’ perceived differences among competing alternatives observes that customers’

who are loyal to a firm hold a strong belief that the firm continues to represent the best

alternative (Amine, 1998; Oliver, 1999). To this extent, we can consider commitment as

the degree to which a firm represents the best available choices it has.

“Conflict handling dimension” are also found to have positive and moderate

relationship (correlation coefficient = 0.681) towards customers’ loyalty. According to

84
Dwyer et al., (1987) conflict handling as the ability of each supplier’s to minimize the

negative consequences of manifest and potential conflicts. In nature, once the firm is

successful in handling conflicts and manage potential problems that exist, it will bring

confident to the customers in dealing with the bank and they will loyal to that bank.

Conflict handling is an important relationship builder. Even though it is difficult

to service industries especially banking sector to achieve zero service failure all at all the

times, but it is important that the particular bank put in place effective problem solving

machinery. A problem that is resolved satisfactorily will make customer to be happy.

However, minor issues that are not handling carefully could result in defection. A better

approach that could be used by bank managers is to be proactive in planning and

implementation problem solving procedures which includes avoiding potential conflicts,

solving conflicts before they manifest, and identifying potential sources of conflict. These

efforts will result a better customer relationship and loyalty to the firm. In short, good

conflict handling will result in high quality of customer relationship.

The result of this research also indicate that “values dimension” is positively

correlated (correlation coefficient = 0.689) towards customers’ loyalty in banking sector.

This shows that bank customer are also looking for the “value dimension” while dealing

with their banks. Each customer expects their firm to deliver high value services.

Customer value perceptions are also regarded as a key determinant of overall customer

satisfaction, and customer loyalty. In the point view of the value is the benefits, such as

85
caring service that they receive from the bank. This finding was supported by the findings

by Naceur & Azaddin (2005). They found that personal skills and values are the only

significant service quality dimension among the customers of Islamic banks. Customers

of Islamic bank are more concerned with the impression of sincerity, trust and caring

given to them by the bank.

“Empathy dimension” is also found to have positive and high relationship

(correlation coefficient = 0.744) towards customers’ loyalty. Empathy is important in

order for services providers to build long-term relationships with their customers’. Every

customer likes to be treated nicely by the bank employees. In other words, bank

employees must treat their customers’ in the way they would like to be treated. If this

happens, it will result in customers’ satisfaction and will make customers’ loyal to the

bank. Empathy also is very highly associated with willingness to recommend after

allowing for the effects due to overall satisfaction and affective attitude. Therefore, local

banks need to understand their customers’ better and continuously evaluate their service

quality in order to maintain their market share.

5.2 Recommendations

The first recommendation is that if banks wish to retain and develop loyal customers’,

they should be trustworthy and committed to their service ethic, must resolve conflicts in

86
a manner that will eliminate unimportant loss and inconvenience to customers’. In

addition, the growing number of banks in this country led to the increase in the

competition in the banking sector. Therefore, banks must be well aware of the want and

needs of the customers’. Customers nowadays are demanding more not only based on the

product but they demand the way they are treated. Once they are satisfied with the

services that were provided by the firms, they will communicate about the firms or

product to the other customers’. At the same time it will attract new customers for the

firm and may even increase their sales, revenue and profit. Loyal customers’ can also

serve as useful sources of new product or service ideas.

Similarly, loyal customers’ are more likely to remain with the organization as a

result of decision-making process that relies on affective states rather than on more

objective means. These loyal customer become advocates to the organization with the

intention to increase the level of business they conduct with the organization and consider

the organization as their first choice for new business requirements (Ganesh et al., 2000,

Zeithaml et al., 1996). Overall, a more loyal customer base leads to higher levels of long-

term profitability (Reichheld & Schneider, 1990). This is because loyal customers are

more likely to buy and pay premium prices (Ganesh et al., 2000) and bring new

customers to the organization who are themselves more loyal (Reichheld, 1993). Based

on the findings of this research it is recommended that banks should put more effort to

attract customers especially in factors related to commitment, empathy and values. In

order to create and maintain loyalty, business must recognize that many of their core

product and service attributes are necessary, but not sufficient for loyalty. Furthermore,

87
business needs to have a strong connection with its customers in order to create and

maintain customer loyalty. A strong professional relationship creates an advantage that

can keep the customer from switching to a competitor.

Management can also use this information in hiring and training staff. When

hiring employees, banks can look for signs of ability and interest to establish and

maintain good long-term interpersonal relationship. Candidates with personal values that

are strong in trusting behavior, amicable conflict resolution, strong commitment to tasks

and relationship and adding with empathy values should be considered. Beyond the point

of hiring, management should recognize and reward behaviors that contribute to quality

relationship with customers. Such recognition will create a higher level of motivation for

the employees and greater commitment to achieving the highest possible level of

relationship quality.

5.3 Limitation of study

The sampling frame for this study was only limited to the students in UUM and

employees of Permintex Industries Sdn. Bhd. Therefore, the findings of this study were

unable to be generalizing to all population of consumer in Malaysia. Convenience

sampling method was chosen since it is the cheap and fast way to obtain information

however the information is unreliable. It is recommended that future research utilize

random sampling methods to ensure the generalizability of the findings. A broader

demographic profile should be taken into consideration. Research subject that’s covers

88
other groups as well in broader geographical location throughout Malaysia should also be

conducted. This research was conducted in a bank setting. Although the dimensions

identified were really verified in this industry, it will be helpful to replicate this research

in other industries. Another important future research direction is to examine the roles of

the relationship marketing underpinnings, overall relationship quality and customer

satisfaction in creating customer loyalty.

5.4 Conclusion

Banks, which are keen to create high quality relationship with customer, must behave

trust-worthily. They must give and keep promises, be concerned about security of

transactions, provide quality services, show respect to customers, fulfill obligations to

customer, understand customer situations and strive to enhance customers’ confidence in

the bank. These actions would lead to increased trust in the bank and its services, as well

as perceived quality of the relationship. Commitment to service and customer relationship

is another strategy that banks desiring to create quality relationship with customer should

pursue. The purpose of conflict handling is to assure that there is no probability to

receive any potential conflicts or problems. If there is a conflict, the bank should planning

and solving the problems as soon as possible in order to assure that the problem are being

well managed and the relationship between bank and entire customer will run as

expected. Same goes to the value and empathy.

89
 Customers like to pamper with a good service, with a caring fashion and they

wanted that each of the bank employees could understand their situation, solve their

problem, value them as supposed and lastly, can fulfill their wants and needs towards the

product or services which provided by the bank. Therefore, the underpinnings

relationship marketing is determining customers’ loyalty in banking sector. This is being

proved and suggested by through pass researches. This research also indicates that the

five (5) dimension of relationship marketing such as trust, commitment, conflict

handling, values and empathy are positively related with customers’ loyalty in banking

sector.

In a nut shell, the researcher would like to highlight again the final results

obtained from the analysis. The objectives of the research is to understand the concept of

five underpinnings of the relationship marketing such as trust, commitment, conflict

handling, values and empathy towards customers’ loyalty in banking sector. Demographic

factor such as gender, age, highest educational qualification, occupation and average

monthly income are found not to have any effect on the customers’ loyalty towards their

bank. But, race and religion factor have the direct effect towards loyalty in banking

sector. Regarding the Pearson Correlation analysis, it can be clearly seen that the five (5)

relationship marketing dimensions namely, trust, commitment, conflict handling, values

and empathy are positively related to customers’ loyalty in banking sector. The regression

analysis also shown that 68.7 percent customers’ loyalty are explained by the independent

variables; trust, commitment, conflict handling, values and empathy.

90
 In short, this research found that trust, commitment, conflict handling, values and

empathy ability of the bank determine the quality of the bank-customer relationship and

loyalty of their customers. When the bank behaves trustworthily, shows commitment,

handle conflicts well, treat the customers as suppose they should, firm-customer

relationship would be enhanced and at the same time the firm will gain more customers

loyalty towards their bank. However, trust drives customers’ loyalty more than the other

dimensions. Managers and marketers of banking services in particular and service

organizations in general, should recognize the salience of these factors in their efforts to

build quality relationship with customers and to manage customer relationship more

effectively.

Referenc
es
Amine, A. (1998). Consumers’ true brand loyalty: the central role of commitment.
Journal of Strategic Marketing, 6 (4), pp. 305-19.

Baldinger, A. and Rubinson, J. (1996). Brand-loyalty: the link between attitude and
behavior. Journal of Advertising Research, pp. 22-34.

Bang, H. K., Raymond, M. A., taylor, C. R. Moon, Y. S. (2004). A comparison of service

quality dimensions conveyed in advertisements for service providers in the USA
and Korea, International Marketing Review, 22 (30), pp. 309-26.

91
Baumann, C., Burton, S., Elliott, G. and Kehr, H. M. (2007). Prediction of attitude and
behavior intentions in retail banking. International Journal of Bank Marketing, 25
(2), pp. 102-116.

Bearden, W. O. and Netemeyer, R. G. (1999). Handbook of Marketing Scales: multi-item

Measures for marketing and consumer behavior research. 2nd ed. USA: Sage
Publications.

Beeli, A., Martin, J.D. and Quintana, A. (2004). A model of customer loyalty in the retail
banking market. European Journal of Marketing, 38 (1/2), pp. 253-275.

Bendapudi, N., and Berry, L. L. (1997). Customers’ motivation for maintaining

relationship with service providers. Journal of Retailing, 73 (1), pp. 15-37.

Berry, L. (1996). On great service: a framework for actions. Journal of the academy of
Marketing Science, 24 (2), pp. 176.

Bhatty, M., Skinkle, R., and Spalding, T. (2001). Redefining customer loyalty, the
customer’s way. Journal of Ivey Business, 65 (3), pp.13-7.
Bitner, M. J. (1990) Evaluating service encounters: the effects of physical
surroundings and employee responses. Journal of Marketing, 54 (2), pp. 69-82.

Bitner, M. J., Bernard, H. B., and Mary S. T. (1990). The service

encounter: diagnosing favorable and unfavorable incidents. Journal of
Marketing, 54 (1), pp. 71-94.

Blankenship, A. B., Breen, G. E. and Dutka, A. (1998). State of the Art Marketing
Research. 2nd ed. USA: NTC Business Books.

Boulding, W., Ajay K., Richard S., and Zeithaml, V. A. (1993). A

dynamic process model of service quality: from expectations to behavioral
intentions. Journal of Marketing Research, 30 (1), pp. 7-27.

92
Bowen, J. T. and Shoemaker, S. (1998). Loyalty: a strategic commitment. The Cornell
Hotel and Restaurant Administration Quarterly, 44 (5), pp. 31-47.

Caruana, A. (2002). Service loyalty: the effects of service quality and the mediating role
of customer satisfaction. European Journal of Marketing, 36 (7-8), pp. 811-28.

Cavana, R. Y., Delahaye, B. D. & Sekaran, U. (2001). Applied business research:

qualitative and quantitative methods. Melbourne: John Wiley & Sons.

Churchill, G. A. and Peter, P. (1984). Research design effects n the reliability of rating
scales: a meta-analysis. Journal of Marketing Research, 21 (4), pp. 360-75.

Coakes, S. J. & Steed, L. (2007). SPSS version 14.0 for windows. Australia: John Wiley
& Sons.

Cronin, J., Brady, M. and Hult, T. (2000). Assessing the effects of quality, value, and
customer satisfaction on consumer behavioral intentions in service
environments.Journal of Retailing, 76 (2), pp. 193-218.
Cooper, D. R. & Schindler, P. S. (2006). Business research methods 9th ed. McGraw Hill.

Crosby, L. A. & Tailor, J. R. (1983). Psychological commitment and its

effects on post-decision evaluation and preference stability among voters.
Journal of Consumer Research, 9 (March), pp. 413-431.

Curasi, C. and Kennedy, K. (2002). From prisoner to apostles: a typology of repeat

buyers and loyal customers in service business. Journal of service Marketing, 16
(4), pp. 322-41.

Day, G. S. (1969). A two-dimension concept of brand loyalty. Journal of Advertising

Research, 9 (3), pp. 29-35.

93
De vaues, D.A. (2002). Surveys in social research. Sydney: Allen & Unwin.

Disney, J. (1999). Customer satisfaction and loyalty: the critical elements of service
quality. Total Quality Management, 10 (4-5), pp. 491-98.

Dwyer, F.R., Schurr, P.H. and Oh, S. (1987). Developing buyer-seller relationships.
Journal of Marketing, 51 (2), pp. 11-27.

Egan, J. (2000). Drivers to relational strategies in retailing. International Journal of

Retail & Distribution Management, 28 (8), pp. 379-86.

Evans, K.R. and Beltramini, R.F. (1987). A theoretical model of consumer negotiated
pricing: an orientation perspective. Journal of Marketing, 51, pp. 58-73.
File, K. M. and Prince, R. A. (1993). Evaluating the effectiveness of interactive
marketing. Journal of Service Marketing, 7 (3), pp. 49-58.

Fornell, C., Johnson, M. D., Anderson, E. W., Cha, J., and Bryant, B. E. (1996)T. he
american customer satisfaction index: nature, purpose, and findings. Journal of
Marketing, 60 (October), pp. 7-18.
Foster, B., and Cadogan, J. (2000). Relationship selling and customer loyalty: an
empirical investigation. Marketing Intelligence and Planning,18 (4), pp. 185-99.

Founier, S. (1998). Consumer and their brands: developing relationship theory in

consumer research. Journal of Consumer Research, 24 (4), pp. 343-374.

Ganesh, J., Arnold, M. J., and Reynolds, K. E. (2000). Understanding the customer base
of service providers: an examination of the differences between switchers and
stayers. Journal of Marketing, 65 (3), pp. 65-87.

Gremler, D. D., and Stephen, W. B. (1999). The loyalty ripple effect appreciating the full
value of customers. International Journal of Service Industry Management, 10
(3), pp. 271-91.

94
Gutman, J. (1982). A means-end chain model based on consumer categories processes.
Journal of Marketing, 46 (Spring), pp. 60-72.

Gutman, J. (1991). Exploring the nature of linkages between consequences and values.
Journal of Business Research, 22 (March), pp. 60-72.

Heskett, J. L. (2002). Beyond customer loyalty. Managing Service Quality,12 (6), pp.
355-7.

Heskett, J., Jones, T. O., Loveman, G. W., and Schlesinger, L. A. (1994). Putting the
service-profit chain to work. Harvard Business Review, 72 (2), pp. 164-174.

Hofmeyr, J. and Rice, B. (2000). Commitment-led marketing. UK: John Wiley & Sons.

Huber, F., Herrmann, A. and Morgan, R. E. (2001). Gaining competitive advantage

through customer value oriented management. The Journal Marketing, 18 (1), pp.
41-53.
Huseyin, A., Salih, T. K., and Salime, M. S. (2005). A comparison of service quality in
the banking industry. International Journal of Bank Marketing, 23 (7), pp. 508-
26.

Jacob, J. (1971). A model of multi-brand loyalty. Journal of Advertising Research, 11

(3), pp. 25-31.

Jacoby, J., and Chestnut, R. W. (1978).Brand loyalty measurement and management.

New York: John Wiley & Son.

Keating, B., Rugimbana, R., and Quazi, A. (2003). Differentiating between service
quality and relationship quality in cyberspace. Managing Service Quality, 13 (3),
pp. 217-32.

95
Keaveney, S. (1995). Customer switching behavior in service industries: an exploratory
study. Journal of Marketing, 59 (71-82).

Jacoby, J. & Kyner, D. B. (1973). Brand loyalty vs. repeat purchasing behavior. Journal
of Marketing Research, Chicago, 10 (1), pp. 1-10.

Jones, T. O. and Sasser, W. E. (1995). Why satisfied customers defect. Harvard Business
Review, 73 (6), pp. 88-99.

Kandampully, J. (1998). Service quality to service loyalty: a relationship which goes

beyond customer services. Total Quality Management, 9 (6), pp. 431-43.

Keaveney, S. (1995). Customer switching behavior in service industries: an exploratory

study. Journal of Marketing, 59, pp. 71-82.

Kettinger, W. J. and Lee. C.C. (1995). Perceived service quality and user satisfaction
with the information services function. Decision Sciences, 25 (5), pp. 737-66.

Knox, S., and Walker, D. (2001). Measuring and managing brand loyalty. Journal of
Strategic Marketing, 9 (2), pp. 111-28.

Kunyk, D. & Olson, J.K. (2001). Clarification of conceptualizations of empathy. Journal

of Advanced Nursing, 35 (3), pp. 317-25.

Leowenthal, K.M. (1996). An introduction to psychological test ans scales. 141.

Malhotra, N.K., Hall, J., Shaw, M. and Crisp, M. (1996). Marketing research: an applied
orientation. Sydney NSW, Australi: Prentice Hall.

Miles, M.B. and Huberman, A.M. 91994). Qualitative data analysis: an expanded
sourcebook. 2nd ed. USA: Sage.

96
Moorman, C., Zaltman, G. and Deshpande, R. (1992). Relationship between providers
and users of market research: the dynamics of trust within and between
organizations. Journal of Marketing Research,29 (3), pp.314-28.

Morgan, R. and Hunt, S. (1994). The commitment-trust theory of relationship marketing.

Journal of Marketing, 58 (3), pp. 20-38.

Morris, D. S., Barnes, B. R., and Lynch, J. E. (1999). Relationship marketing needs total
quality Management. Total Quality Management, 10 (4-5), pp. 659.

Naceur, J. and Azaddin, K. (2005). A customized measure of service quality in the UAE.
Managing Service Quality, 15 (4), pp. 374-88.

Naresh, K., M. (1986). Consumer behavior and marketing actions. Journal of Marketing
Science, 11 (1), pp. 191-93.

Ndubisi, N. O. (2004). Understanding the salience of cultural dimensions on relationship

marketing, it’s underpinnings and aftermaths. Cross Cultural Management, 11
(3).

Ndubisi, N. O. (2007). Relationship marketing and customer loyalty. Marketing

Intelligence & Planning, 25 (1), pp. 98-106.

Ndubisi, N. O. and Wah, C.K. (2005). Factorial and discriminant analyses of the
underpinnings of relationship marketing and customer satisfaction. International
Journal of Bank Marketing, 23 (7), pp. 542-557.

Neuman, W. L. (2003). Social research methods: qualitative and quantitative approaches.

5th ed. Boston, USA: Allyn & Bacon.

Oliver, R. L. (1993). Cognitive, affective, and attribute bases of the satisfaction response.
Journal of Consumer Research, 20 (3), pp. 418-30.

97
Oliver, R. L. (1999). Whence consumer loyalty?. Journal of Merketing, 63, pp.33-44.

Olsen, S. (2002). Comparative evaluation and the relationship between quality,

satisfaction and repurchase loyalty. Journal of Academy of Marketing Science, 30
(3), pp. 240-9.

Parasuraman, A. (1997). Reflections on gaining competitive advantage through customer

Value. Journal of the Academy of Marketing Science, 25 (2), pp. 154-61.

Parasuraman, A., Zeithaml, V. A. and Berry, L. L. (1985). A conceptual model of service

quality and its implications for future research. Journal of Marketing, 49 (4), pp.
41-50.

Parasuraman, A., Zeithaml, V. A. and Berry, L. L. (1988). SERVQUAL: a multiple-item

scale for measuring consumer perceptions of service quality. Journal of Retailing,
64, pp. 12-40.

Parasuraman, A. and Grewal, D. (2000). The impact of technology on the quality-value-

loyalty chain: a research agenda. Journal of the Academy of Marketing Science,
28 (1), pp. 168-74.

Park, C., and Kim, Y. (2003). Identifying key factors affecting consumer purchase
behavior in an online shopping context. International Journal of Retail &
Distribution Management, 31 (1), pp. 69-29.

Pressey, A. D., and Mathews, B. P. (2000). Barriers to relationship marketing in

consumer retailing. Journal of Services Marketing, 14 (3), pp. 272-86.

Pritchard, M., Havitz, M. and Howard, D. (1999). Analyzing the commitment-loyalty

link in service contexts. Journal of the Academy of Marketing Science, 27 (3), pp.
333-48.

98
Pruitt, D.G. (1981). Negotiation Behaviour. New York:Academic Press Inc.

Ranchhod, A. and Zhou, F. (2001). Comparing respondents of e-mail and mail surveys:
understanding the implications of technology. Marketing Intelligence and
Planning, 19 (4), pp. 254-62.

Raymond, M.A. and Rylance, W. (1995). Evaluation and management of professional

services in Korea. Advances in International Marketing, 7, pp. 111-15.

Reichheld, F. and Aspinall, K. (1993). Building high-loyalty business systems. Journal

of Retail Banking, 15 (4), pp. 21-9.

Reichheld, F. (1996). Learning from customer defections. Harvard Business Review, 74

(2), pp. 56-69.

Reichheld, F. F., and Sasser, W. E. (1990). Zero defections: quality comes to services.
Harvard Business Review, 68 (5), pp. 105-11.

Reichheld, F. F.(2003). The one number you need to grow. Harvard Business Review, 81
(12), pp. 46-54.

Reichheld, F. and Schefter, P. (2000). E-loyalty: your secret weapon on the web. Harvard
Business Review, 78 (4), pp. 105-13.

Tyan, G.W. and Bernard, H.R. (2000). Data management and analysis methods. In
handbook of qualitative research, USA” Denzin, N.K. and Lincoln, Y.S.
Sage Publications.

Sekaran, U. (2004). Research method for business: a skill building approach. New York:
John Wiley & Sons.

99
Selnes, F. (1998). Antecedents and consequence of trust and satisfaction in buyer-seller
relationship. European Journal of Marketing, 32 (3), pp. 305-22.

Shanker, V,. Smith, A., and Rangaswamy, A. (2003). Customer satisfaction and loyalty
in online and offline environments. International Journal of Research in
Marketing, 20 (2), pp. 153-75.

Sirdeshmukh, D. S., J. and Sabol, B. (2002). Consumer trust, value,

and loyalty in relational exchanges. Journal of Marketing, 66 (15-37).

Slater, S. (1997). Developing a customer value-based theory of the firm. Journal of the
Academy of Marketing Science, 25 (2), pp. 162-7.

Srinivasan, S., Anderson, R., and Ponnavolu (2002). Customer loyalty in e-commerce: an
exploration of its antecedents and consequences. Journal of Retailing, 78 (1), pp.
41-50.

Storbacka, K., Strandvik, T. and Gronross, C. (1994). Managing customer relationships

for profit: the dynamics of relationship quality. International Journal of Service
Industry Management, 5 (5), pp. 21-38.

Tepeci, M. (1999). Increasing Brand Loyalty in the Hospitality Industry. International

Journal of Contemporary Hospitality Management, 11 (5), pp. 223-9.

Vandermerwe, S. (2003). Customer-minded growth through services. Managing Service

Quality, 13 (4), pp. 262-6.

White, S. and Schneider, B. (2000). Climbing the commitment ladder: the role of
expectations disconfirmation on consumers’ behavioral intentions. Journal of
Service Research, 2 (3), pp. 240-53.

Wilkie, W. L. (1994). Consumer behavior, 3rd ed., New York: John Wiley & Sons.

100
Wong, A. and Sohal, A. (2002). An examination of the relationship between trust,
commitment and relationship quality. International Journal of Retail and
Distribution Management, 30 (1), pp. 34-50.

Wong, A., and Sohal, A. (2003). Service quality and customer loyalty perspective on two
levels of retail relationship. Journal of Service Marketing, 17 (5), pp. 495-513.

Vavra, T. G. (1992). After marketing: how to keep customers for life through relationship
marketing. Homewood: Business One Irwin.

Zeithaml, V. A., Berry, L. L., and Parasuraman, A. (1996). The behavioral

consequences of service quality. Journal of Marketing, 60 (April), pp. 31-46.

Zeithaml, V. A. (1981). How consumer evaluation process differ between goods and
services. In Services marketing Proceedings. Chicago: American Marketing
Association.

Zeithaml, V. A. (2000). Service quality, profitability, and the economic worth of

customers: what we know and what we need to learn. Journal of the Academy of
Marketing Science, 28 (1), pp. 67-85.

Zeithaml, V. A., Berry, L. L., and Parasuraman, A. (1996). The behavioral consequences
of service quality. Journal of Marketing, 60, pp. 31-46.

Zikmund, W. (2000). Business Research Methods, 6th edn, The Dryden Press, Harcourt
College Publishers.

101
APPENDIX A

102
More free assignment, please visit: www.scribdblog.com

PART 1

DEMOGRAPHIC. ( Choose the suitable answer and tick  in the box given for each
question.

1. Gender

Male Female

2. Age

Below 20 years 20 – 39 years

40 – 59 years 60 years and above

3. Race

Malay Chinese

Indian Others

4. Religion

Islam Buddha

103
 Hindu Others

5. Highest educational qualification

Primary Secondary

HSC/Diploma Degree

Postgraduate Others

6. Occupation

Government Sector Private Sector

Own Business Student

Others

7. Monthly Income

Below RM 2000 RM 2000 – RM 3999

RM 4000 – RM 5999 RM 6000 and above

104
PART 11
Choose the statement which u thinks accurate and circle the score provided for each
question given.
Strongly Disagree No Opinion Agree Strongly
Disagree Agree
1 2 3 4 5

1. The bank is very concern with security

for my transactions 1 2 3 4 5
2. The bank’s promises are reliable 1 2 3 4 5
3. The bank is consistent in providing quality
service 1 2 3 4 5
4. Employee of the bank show respect to
customers 1 2 3 4 5
5. The bank fulfills its obligation to customers 1 2 3 4 5
6. I have confidence in the bank’s services 1 2 3 4 5
7. The bank makes adjustment to suit my needs 1 2 3 4 5
8. The bank offers personalized services to meet
customer’s need 1 2 3 4 5
9. The bank is flexible when its services are
changed 1 2 3 4 5
10. The bank is flexible in serving my needs 1 2 3 4 5
11. Services of the bank are in line with our
social values 1 2 3 4 5

105
12. Services of the bank are consistent with
my personal values 1 2 3 4 5
13. Services of the bank are consistent with
my life goals 1 2 3 4 5
14. My bank value me as a customer 1 2 3 4 5
15. Service of this bank contributed to the
welfare of the society 1 2 3 4 5
16. Employees of the bank deal with customer’s
in a caring fashion 1 2 3 4 5
17. Bank employee’s give the individualized
attention to customers 1 2 3 4 5

18. The employees of the bank understand your

specific needs 1 2 3 4 5
19. Bank employees have the customer’s best
interest at heart 1 2 3 4 5
20. Bank has operating hours convenient to all its
customers 1 2 3 4 5
21. The bank tries to avoid potential conflict 1 2 3 4 5
22. The bank tries to solve manifest conflicts
before they create problems 1 2 3 4 5
23. The bank has the ability to openly discuss
solutions when problem arise 1 2 3 4 5
24. The bank is responsive to my complaints 1 2 3 4 5
25. The service provider shows a sincere interest
in solving customer problem 1 2 3 4 5
26. Considering the bank as first choice among
other banks in the area; and the bank that first
comes to my mind when making purchases
decision on bank services. 1 2 3 4 5
27. If I had to do it over again, I would still
choose to use the bank 1 2 3 4 5

106
28. I do not like to change to another bank
because I value the selected bank 1 2 3 4 5
29. I am a customer loyalty to my bank 1 2 3 4 5
30. I would always recommend my bank to
someone who seeks my advice 1 2 3 4 5

APPENDIX B

107
RELIABILITY

108
Customer's Loyalty

Re liability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized
Alpha Items N of Items
.901 .901 5

Item-Total Statistics

Scale Corrected Cronbach's

Scale Mean if Variance if Item-Total Alpha if Item
Item Deleted Item Deleted Correlation Deleted
Customer's Loyalty 26 15.50 10.135 .730 .885
Customer's Loyalty 27 15.57 9.283 .765 .876
Customer's Loyalty 28 15.50 8.923 .803 .868
Customer's Loyalty 29 15.44 8.686 .806 .868
Customer's Loyalty 30 15.55 10.293 .677 .895

Trust Dimension

109
 Re liability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized
Alpha Items N of Items
.856 .859 6

Ite m-Total Statistics

Scale Corrected Cronbach's

Scale Mean if Variance if Item-Total Alpha if Item
Item Deleted Item Deleted Correlation Deleted
Trust 1 19.29 9.726 .696 .822
Trust 2 19.45 9.913 .688 .824
Trust 3 19.55 9.651 .660 .828
Trust 4 19.52 10.018 .501 .862
Trust 5 19.36 9.868 .675 .826
Trust 6 19.38 9.830 .669 .827

Commitment Dimension

Re liability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized
Alpha Items N of Items
.858 .858 4

110
 Ite m-Total Statistics

Scale Corrected Cronbach's

Scale Mean if Variance if Item-Total Alpha if Item
Item Deleted Item Deleted Correlation Deleted
Commitment 7 11.12 5.928 .603 .858
Commitment 8 11.02 5.175 .746 .800
Commitment 9 11.09 5.473 .730 .807
Commitment 10 11.12 5.607 .735 .806

Conflict Handling Dimension

Re liability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized
Alpha Items N of Items
.869 .869 5

Ite m-Total Statistics

Scale Corrected Cronbach's

Scale Mean if Variance if Item-Total Alpha if Item
Item Deleted Item Deleted Correlation Deleted
Conflict Handling 11 15.49 8.383 .751 .826
Conflict Handling 12 15.38 8.207 .787 .817
Conflict Handling 13 15.41 8.522 .713 .836
Conflict Handling 14 15.40 8.971 .580 .870
Conflict Handling 15 15.49 9.303 .642 .853

111
Values Dimension

Re liability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized
Alpha Items N of Items
.836 .838 5

Ite m-Total Statistics

Scale Corrected Cronbach's

Scale Mean if Variance if Item-Total Alpha if Item
Item Deleted Item Deleted Correlation Deleted
Values 16 14.02 8.722 .614 .810
Values 17 13.99 8.445 .665 .796
Values 18 14.24 8.431 .699 .786
Values 19 14.34 8.547 .729 .780
Values 20 14.25 9.238 .497 .842

Empathy Dimension

Re liability Statistics

Cronbach's
Alpha Based
on
Cronbach's Standardized
Alpha Items N of Items
.855 .856 5

112
 Item-Total Statistics

Scale Corrected Cronbach's

Scale Mean if Variance if Item-Total Alpha if Item
Item Deleted Item Deleted Correlation Deleted
Empathy 21 15.38 8.149 .573 .848
Empathy 22 15.35 8.097 .644 .833
Empathy 23 15.39 7.276 .744 .805
Empathy 24 15.33 7.231 .674 .825
Empathy 25 15.30 7.031 .720 .811

CORRELATIONS

113
114
 Correlations

Conflict_ Customer_
Trust Commitment Handling Values Empathy Loyalty
Trust Pearson Correlation 1 .663** .588** .585** .720** .720**
Sig. (2-tailed) .000 .000 .000 .000 .000
N 138 138 138 138 138 138
Commitment Pearson Correlation .663** 1 .671** .621** .661** .674**
Sig. (2-tailed) .000 .000 .000 .000 .000
N 138 138 138 138 138 138
Conflict Handling Pearson Correlation .588** .671** 1 .665** .631** .681**
Sig. (2-tailed) .000 .000 .000 .000 .000
N 138 138 138 138 138 138
Values Pearson Correlation .585** .621** .665** 1 .729** .689**
Sig. (2-tailed) .000 .000 .000 .000 .000
N 138 138 138 138 138 138
Empathy Pearson Correlation .720** .661** .631** .729** 1 .744**
Sig. (2-tailed) .000 .000 .000 .000 .000
N 138 138 138 138 138 138
Customer Loyalty Pearson Correlation .720** .674** .681** .689** .744** 1
Sig. (2-tailed) .000 .000 .000 .000 .000
N 138 138 138 138 138 138
**. Correlation is significant at the 0.01 level (2-tailed).

More free assignment, please visit: www.scribdblog.com

115
 REGRESSION

More free assignment, please visit: www.scribdblog.com

116
 M ode l Summaryb

Adjusted Std. Error of Durbin-

Model R R Square R Square the Estimate Watson
1 .829 a .687 .675 .43318 1.772
a. Predictors: (Constant), Empathy, Conflict_Handling, Commitment, Trust,
Values
b. Dependent Variable: Customer_Loyalty

ANOVAb

Sum of
Model Squares df Mean Square F Sig.
1 Regression 54.306 5 10.861 57.882 .000 a
Residual 24.769 132 .188
Total 79.075 137
a. Predictors: (Constant), Empathy, Conflict_Handling, Commitment, Trust, Values
b. Dependent Variable: Customer_Loyalty

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients Collinearity Statistics
Model B Std. Error Beta t Sig. Tolerance VIF
1 (Constant) -.212 .250 -.849 .397
Trust .327 .093 .266 3.515 .001 .415 2.411
Commitment .108 .075 .109 1.433 .154 .413 2.423
Conflict_Handling .199 .077 .190 2.572 .011 .436 2.295
Values .172 .082 .163 2.101 .038 .393 2.546
Empathy .273 .096 .243 2.834 .005 .324 3.087
a. Dependent Variable: Customer_Loyalty

a
Collinearity Diagnostics

Variance Proportions
Condition Conflict_
Model Dimension Eigenvalue Index (Constant) Trust Commitment Handling Values Empathy
1 1 5.932 1.000 .00 .00 .00 .00 .00 .00
2 .023 16.069 .63 .01 .10 .02 .09 .00
3 .016 19.278 .00 .02 .50 .00 .44 .02
4 .013 21.315 .05 .13 .01 .68 .00 .14
5 .010 24.812 .28 .23 .38 .29 .26 .10
6 .007 30.060 .03 .61 .01 .00 .21 .73
a. Dependent Variable: Customer_Loyalty

117
More free assignment, please visit: www.scribdblog.com

NORMALITY

118
 Case Proce ssing Summary

Cases
Valid Missing Total
N Percent N Percent N Percent
Trust 138 100.0% 0 .0% 138 100.0%
Commitment 138 100.0% 0 .0% 138 100.0%
Conflict_Handling 138 100.0% 0 .0% 138 100.0%
Values 138 100.0% 0 .0% 138 100.0%
Empathy 138 100.0% 0 .0% 138 100.0%
Customer_Loyalty 138 100.0% 0 .0% 138 100.0%

Descriptives

Statistic Std. Error

Trust Mean 3.8853 .05263
95% Confidence Lower Bound 3.7812
Interval for Mean Upper Bound
3.9893

5% Trimmed Mean 3.9227

Median 4.0000
Variance .382
Std. Deviation .61832
Minimum 2.00
Maximum 5.00
Range 3.00
Interquartile Range .58
Skewness -1.012 .206
Kurtosis 1.321 .410
Commitment Mean 3.6957 .06529
95% Confidence Lower Bound 3.5665
Interval for Mean Upper Bound
3.8248

5% Trimmed Mean 3.7154

Median 4.0000
Variance .588
Std. Deviation .76698
Minimum 1.50
Maximum 5.00
Range 3.50
Interquartile Range 1.06
Skewness -.383 .206
Kurtosis -.446 .410

119
Conflict_Handling Mean 3.8580 .06168
95% Confidence Lower Bound 3.7360
Interval for Mean Upper Bound
3.9799

5% Trimmed Mean 3.8882

Median 4.0000
Variance .525
Std. Deviation .72463
Minimum 2.00
Maximum 5.00
Range 3.00
Interquartile Range 1.00
Skewness -.584 .206
Kurtosis -.305 .410
Values Mean 3.5420 .06144
95% Confidence Lower Bound 3.4205
Interval for Mean Upper Bound
3.6635

5% Trimmed Mean 3.5675

Median 3.6000
Variance .521
Std. Deviation .72180
Minimum 1.60
Maximum 5.00
Range 3.40
Interquartile Range 1.00
Skewness -.521 .206
Kurtosis -.126 .410
Empathy Mean 3.8377 .05747
95% Confidence Lower Bound 3.7240
Interval for Mean Upper Bound
3.9513

5% Trimmed Mean 3.8707

Median 4.0000
Variance .456
Std. Deviation .67513
Minimum 1.80
Maximum 5.00
Range 3.20
Interquartile Range 1.00
Skewness -.683 .206
Kurtosis .159 .410

120
 Customer_Loyalty Mean 3.8783 .06467
95% Confidence Lower Bound 3.7504
Interval for Mean Upper Bound
4.0061

5% Trimmed Mean 3.9142

Median 4.0000
Variance .577
Std. Deviation .75973
Minimum 1.60
Maximum 5.00
Range 3.40
Interquartile Range 1.00
Skewness -.701 .206
Kurtosis -.045 .410

Te sts of Normality
a
Kolmogorov-Smirnov Shapiro-Wilk
Statistic df Sig. Statistic df Sig.
Trust .190 138 .000 .920 138 .000
Commitment .161 138 .000 .964 138 .001
Conflict_Handling .165 138 .000 .951 138 .000
Values .143 138 .000 .963 138 .001
Empathy .144 138 .000 .954 138 .000
Customer_Loyalty .158 138 .000 .943 138 .000
a. Lilliefors Significance Correction

121
More free assignment, please visit: www.scribdblog.com

ONE WAY
More free assignment, please visit: www.scribdblog.com

122
 Descriptives

Customer_Loyalty
95% Confidence Interval for
Mean
N Mean Std. Deviation Std. Error Lower Bound Upper Bound Minimum Maximum
Malay 95 3.7811 .72586 .07447 3.6332 3.9289 1.60 4.80
Chinese 31 3.9935 .87557 .15726 3.6724 4.3147 2.20 5.00
Indian 12 4.3500 .48336 .13953 4.0429 4.6571 3.60 5.00
Total 138 3.8783 .75973 .06467 3.7504 4.0061 1.60 5.00

Te st of Homoge ne ity of Variance s

Customer_Loyalty
Levene
Statistic df1 df2 Sig.
2.958 2 135 .055

ANOVA

Customer_Loyalty
Sum of
Squares df Mean Square F Sig.
Between Groups 3.980 2 1.990 3.578 .031
Within Groups 75.095 135 .556
Total 79.075 137

123
 Descriptives

Customer_Loyalty
95% Confidence Interval for
Mean
N Mean Std. Deviation Std. Error Lower Bound Upper Bound Minimum Maximum
Islam 95 3.7811 .72586 .07447 3.6332 3.9289 1.60 4.80
Buddha 31 3.9935 .87557 .15726 3.6724 4.3147 2.20 5.00
Hindu 12 4.3500 .48336 .13953 4.0429 4.6571 3.60 5.00
Total 138 3.8783 .75973 .06467 3.7504 4.0061 1.60 5.00

Te st of Homoge ne ity of Variance s

Customer_Loyalty
Levene
Statistic df1 df2 Sig.
2.958 2 135 .055

ANOVA

Customer_Loyalty
Sum of
Squares df Mean Square F Sig.
Between Groups 3.980 2 1.990 3.578 .031
Within Groups 75.095 135 .556
Total 79.075 137

124
 Descriptives

Customer_Loyalty
95% Confidence Interval for
Mean
N Mean Std. Deviation Std. Error Lower Bound Upper Bound Minimum Maximum
Below than RM2000 70 3.7943 .75831 .09064 3.6135 3.9751 1.60 5.00
RM2000 till RM3999 56 3.9607 .75743 .10122 3.7579 4.1636 1.80 5.00
RM4001 till RM5999 10 3.8800 .79554 .25157 3.3109 4.4491 2.60 5.00
RM6000 and above 2 4.5000 .70711 .50000 -1.8531 10.8531 4.00 5.00
Total 138 3.8783 .75973 .06467 3.7504 4.0061 1.60 5.00

Te st of Homoge ne ity of Variance s

Customer_Loyalty
Levene
Statistic df1 df2 Sig.
.060 3 134 .981

More free assignment, please visit: www.scribdblog.com

ANOVA

Customer_Loyalty
Sum of
Squares df Mean Square F Sig.
Between Groups 1.647 3 .549 .950 .418
Within Groups 77.427 134 .578
Total 79.075 137

125
 Descriptives

Customer_Loyalty
95% Confidence Interval for
Mean
N Mean Std. Deviation Std. Error Lower Bound Upper Bound Minimum Maximum
Primary 1 4.0000 . . . . 4.00 4.00
Secondary 13 3.5385 .75447 .20925 3.0825 3.9944 2.40 4.80
HSC/Diploma 30 3.8667 .72651 .13264 3.5954 4.1379 2.40 5.00
Degree 78 3.9051 .76190 .08627 3.7333 4.0769 1.80 5.00
Postgraduate 14 4.0429 .88814 .23737 3.5301 4.5557 1.60 5.00
Others 2 4.0000 .00000 .00000 4.0000 4.0000 4.00 4.00
Total 138 3.8783 .75973 .06467 3.7504 4.0061 1.60 5.00

Te st of Homoge ne ity of Variance s

Customer_Loyalty
Levene
Statistic df1 df2 Sig.
.918 a 4 132 .456
a. Groups with only one case are ignored in
computing the test of homogeneity of
variance for Customer_Loyalty.

More free assignment, please visit: www.scribdblog.com

ANOVA

Customer_Loyalty
Sum of
Squares df Mean Square F Sig.
Between Groups 1.985 5 .397 .680 .639
Within Groups 77.090 132 .584
Total 79.075 137

126
 Descriptives

Customer_Loyalty
95% Confidence Interval for
Mean
N Mean Std. Deviation Std. Error Lower Bound Upper Bound Minimum Maximum
Goverment 3 3.5333 .46188 .26667 2.3860 4.6807 3.00 3.80
Private 80 3.8950 .75973 .08494 3.7259 4.0641 1.80 5.00
Own Business 8 4.0750 .39911 .14111 3.7413 4.4087 3.40 4.80
Student 44 3.8273 .85027 .12818 3.5688 4.0858 1.60 5.00
Others 3 4.0000 .00000 .00000 4.0000 4.0000 4.00 4.00
Total 138 3.8783 .75973 .06467 3.7504 4.0061 1.60 5.00

Te st of Homoge ne ity of Variance s

Customer_Loyalty
Levene
Statistic df1 df2 Sig.
3.231 4 133 .014

ANOVA

Customer_Loyalty
Sum of
Squares df Mean Square F Sig.
Between Groups .848 4 .212 .360 .836
Within Groups 78.227 133 .588
Total 79.075 137

127
 POST HOC TESTS

More free assignment, please visit: www.scribdblog.com

128
 M ultiple Comparisons

Dependent Variable: Customer_Loyalty

Tukey HSD

Mean
Difference 95% Confidence Interval
(I) Race (J) Race (I-J) Std. Error Sig. Lower Bound Upper Bound
Malay Chinese -.21250 .15427 .356 -.5781 .1531
Indian -.56895* .22850 .037 -1.1104 -.0274
Chinese Malay .21250 .15427 .356 -.1531 .5781
Indian -.35645 .25357 .341 -.9574 .2445
Indian Malay .56895* .22850 .037 .0274 1.1104
Chinese .35645 .25357 .341 -.2445 .9574
*. The mean difference is significant at the .05 level.

Custome r_Loyalty
a,b
Tukey HSD
Subset for alpha = .05
Race N 1 2
Malay 95 3.7811
Chinese 31 3.9935 3.9935
Indian 12 4.3500
Sig. .589 .229
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 23.787.
b. The group sizes are unequal. The harmonic mean
of the group sizes is used. Type I error levels are
not guaranteed.

129
 M ultiple Comparisons

Dependent Variable: Customer_Loyalty

Tukey HSD

Mean
Difference 95% Confidence Interval
(I) Religion (J) Religion (I-J) Std. Error Sig. Lower Bound Upper Bound
Islam Buddha -.21250 .15427 .356 -.5781 .1531
Hindu -.56895* .22850 .037 -1.1104 -.0274
Buddha Islam .21250 .15427 .356 -.1531 .5781
Hindu -.35645 .25357 .341 -.9574 .2445
Hindu Islam .56895* .22850 .037 .0274 1.1104
Buddha .35645 .25357 .341 -.2445 .9574
*. The mean difference is significant at the .05 level.

Custome r_Loyalty
a,b
Tukey HSD
Subset for alpha = .05
Religion N 1 2
Islam 95 3.7811
Buddha 31 3.9935 3.9935
Hindu 12 4.3500
Sig. .589 .229
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 23.787.
b. The group sizes are unequal. The harmonic mean
of the group sizes is used. Type I error levels are
not guaranteed.

130
 M ultiple Comparisons

Dependent Variable: Customer_Loyalty

Tukey HSD

Mean
Difference 95% Confidence Interval
(I) Income (J) Income (I-J) Std. Error Sig. Lower Bound Upper Bound
Below than RM2000 RM2000 till RM3999 -.16643 .13628 .615 -.5210 .1881
RM4001 till RM5999 -.08571 .25697 .987 -.7543 .5828
RM6000 and above -.70571 .54513 .568 -2.1239 .7125
RM2000 till RM3999 Below than RM2000 .16643 .13628 .615 -.1881 .5210
RM4001 till RM5999 .08071 .26096 .990 -.5982 .7596
RM6000 and above -.53929 .54702 .758 -1.9624 .8838
RM4001 till RM5999 Below than RM2000 .08571 .25697 .987 -.5828 .7543
RM2000 till RM3999 -.08071 .26096 .990 -.7596 .5982
RM6000 and above -.62000 .58880 .719 -2.1518 .9118
RM6000 and above Below than RM2000 .70571 .54513 .568 -.7125 2.1239
RM2000 till RM3999 .53929 .54702 .758 -.8838 1.9624
RM4001 till RM5999 .62000 .58880 .719 -.9118 2.1518

Custome r_Loyalty
a,b
Tukey HSD
Subset
for alpha
= .05
Income N 1
Below than RM2000 70 3.7943
RM4001 till RM5999 10 3.8800
RM2000 till RM3999 56 3.9607
RM6000 and above 2 4.5000
Sig. .354
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 6.328.
b. The group sizes are unequal. The harmonic mean
of the group sizes is used. Type I error levels are
not guaranteed.

131
 M ultiple Comparisons

Dependent Variable: Customer_Loyalty

Tukey HSD

Mean
Difference 95% Confidence Interval
(I) Occupation (J) Occupation (I-J) Std. Error Sig. Lower Bound Upper Bound
Goverment Private -.36167 .45101 .930 -1.6090 .8856
Own Business -.54167 .51921 .835 -1.9776 .8942
Student -.29394 .45763 .968 -1.5595 .9717
Others -.46667 .62619 .945 -2.1984 1.2651
Private Goverment .36167 .45101 .930 -.8856 1.6090
Own Business -.18000 .28438 .969 -.9665 .6065
Student .06773 .14394 .990 -.3304 .4658
Others -.10500 .45101 .999 -1.3523 1.1423
Own Business Goverment .54167 .51921 .835 -.8942 1.9776
Private .18000 .28438 .969 -.6065 .9665
Student .24773 .29477 .917 -.5675 1.0629
Others .07500 .51921 1.000 -1.3609 1.5109
Student Goverment .29394 .45763 .968 -.9717 1.5595
Private -.06773 .14394 .990 -.4658 .3304
Own Business -.24773 .29477 .917 -1.0629 .5675
Others -.17273 .45763 .996 -1.4383 1.0929
Others Goverment .46667 .62619 .945 -1.2651 2.1984
Private .10500 .45101 .999 -1.1423 1.3523
Own Business -.07500 .51921 1.000 -1.5109 1.3609
Student .17273 .45763 .996 -1.0929 1.4383

Custome r_Loyalty
a,b
Tukey HSD
Subset
for alpha
= .05
Occupation N 1
Goverment 3 3.5333
Student 44 3.8273
Private 80 3.8950
Others 3 4.0000
Own Business 8 4.0750
Sig. .735
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 6.047.
b. The group sizes are unequal. The harmonic mean
of the group sizes is used. Type I error levels are
not guaranteed.

132
 T-TEST

More free assignment, please visit: www.scribdblog.com

133
 Group Statistics

Std. Error
Gender N Mean Std. Deviation Mean
Customer_Loyalty Male 57 3.9333 .75530 .10004
Female 81 3.8395 .76513 .08501

Independent Samples Test

Independent Samples Test

Levene's Test for

Equality of Variances t-test for Equality of Means
95% Confidence
Interval of the
Mean Std. Error Difference
F Sig. t df Sig. (2-tailed) Difference Difference Lower Upper
Customer_Loyalty Equal variances
.005 .944 .713 136 .477 .09383 .13158 -.16639 .35404
assumed
Equal variances
.715 121.669 .476 .09383 .13129 -.16607 .35373
not assumed

More free assignment, please visit: www.scribdblog.com

134